A loan against property is just that – a loan you get against a property you need to keep as collateral. This makes loan against property a secured loan. The borrower gives a guarantee of repayment using the property as the security.
The rate of interest for a loan against home differs from Bank to Bank. The tenure of loan against property can be up to 15 years.
Loan against property is a fantastic way to arrange for funds when you want to meet any type of high expenses. The list below includes (but is not limited to) what it can be used for:
- Setting up a business
- Purchasing a new home/ land/commercial property
- Studying abroad
- Medical emergencies
- Travel/ Vacation/Honeymoon
The financial information, capability for reimbursement, and value of the property are the majority normally assessed. But other common factors banks look at are:
- Your income
- Value of the property mortgaged
- Your past repayment record for loans, credit cards, etc.
Benefits of loan against property
- The long tenure of LAP makes the EMI more reasonable
- The loan amount is much superior as compared to a personal
- As it is a secured loan. the rate of interest is lower compared to any other unsecured loan
- You have the chance of liquidating LAP whenever surplus funds are available without incurring a prepayment penalty
- LAP can be easily refinanced through other lending institutes