There may arise a situation, when you are in dire need of money for some reason, and options like borrowing money through friends or family members are always available to you. There are some more options which can raise large sums like loan against property or more popularly known as LAP. It is a convenient and easy means to have access to the funds and meet the financial requirements with the help of the banks at lower rate of interest. You can use your property to have an access to the funds as offered by the banks. In general cases, the banks offer as much as 70% of the loan amount based on the evaluation of the property being offered by you as collateral.
Benefits of Loan Against Property Over other Loans
One must always keep a fact in mind when we talk about loan against property that this loan is a secured loan. Therefore the bank never hesitates in offering a good loan amount against the property being used as collateral.
Cheaper Loans Option
While several loans are available in the market like personal loans, the loan against property holds a huge advantage when in comparison with such loans. The loan against property is the cheaper loans comparatively personal loan and thus, is an effective way to meet your needs and demands during the times of financial need. Another fact states that, only home loans are cheaper than the loan against property and thus one can quite easily evaluate the beneficial part considering the rates of interest.
Another advantage associated with the loan against property is the loan tenure, which is much longer in this case, while personal loans, have a short duration ( a maximum of 5 years) for loan repayment, the loan against property is a good option, with the tenure extending to around 20 years, in case, the loan amount is high.
Since the loan tenure is of long duration, the EMIs are automatically going to be small. The EMIs are small and thus making it easy for the borrower to pay the loan amount and its interest with much ease.
While the loan against property is a secured loan, claiming for this loan is quite easy in comparison to the other loans, which required high effort to get cleared. Only requirement for this loan is a clear title of property and all the necessary proofs to support it.
The options are wide when it comes to putting the property as collateral in case of mortgage loan. An individual can put off either a residential property or a commercial one for the purpose of seeking loan. Even, one can claim the loan against the property with the piece of land or even through the property under construction, thus providing a wide range of options for the people looking for the loan against property.
EMI Based Loan or an Overdraft Facility
Several banks offer a feature associated with the loan against property in the form of the paying up of loan amount either in the form of EMI Based loan or an overdraft facility, suiting your needs. The overdraft limit will be decided by the evaluation of the property and your account history.
Fulfill All Your Needs
While the loan against property can be used to meet all the needs of your personal life, there are no restriction attached to this loan. While except personal loans, one has to furnish all details of the specific purpose of loan. For example, in case of educational loan, you need to furnish all details of the educational finance needs, marriage loans, car loans requires the car to be bought etc. The amount as claimed under the loan against property can be used in all legal demands and needs of the person and one can use the money in the way, the person want.
For example, one can use the money in expanding the business or for vacation. One can fund the medical treatment or for studies of kids or marriage of their kids or any other life event. Even, it can be used to close off other high cost loans, which are affecting your personal life or the way you live.
The loan against property can be used to meet all the demands and needs of an individual just like personal loans, and thus there is no bond as such associated with the loan against property.
Another important aspect of loan against property states that if the value of the property rises during the tenure of loan, the borrowers have the option to get a top up on the existing loans. This aspect can be very helpful to the person especially in case, if he/she is a business owner.
With the per closure options available just like many other loan types, the person can prepay the loan amount and get rid off the liability. However, in some cases, like in fixed rate of interest cases, the person has to pay the prepayment penalty just like in other loan types.
The decision to adopt the specific loans completely depends on choice of an individual and the choice can depend on several other factors. While the loan against property is one of the best ways to raise funds in quick time specially when the required loan amount is high. With almost no disadvantage as long as you are able to repay the loan there are no hassle associated with the loan against property and calls out for the best choice.