Are you searching for convenient options to fund your business or avail money for funding your marriage? You will be able to secure a loan easily if you go for a loan against property. A secured loan like Loan against Property (LAP) comes with host of features and benefits to help you finance your high-end expenditures conveniently.
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The loan against property is a second name for a mortgage loan. Banks offer loan against a property when the borrower avails money in return of a mortgage. Mortgage loans can be availed by salaried individuals to finance their personal needs and can be availed by businessmen and self-employed individuals to finance business requirements by mortgaging property.
You can pledge commercial as well as residential property or a plot of land as collateral. The loan will be sanctioned by the bank after estimating the market value of the property.
You should consider availing a property loan under the following circumstances:
Before you go for this type of loan, you must know its features and benefit as compared to other mortgage loans. To help you understand better, the features of LAP are listed below:
The following section will discuss about the documents you must submit to avail loan against property:
See Also: How To Apply For Loan Against Property?
There are some major banks and NBFCs that offer loan against property. However, to avail such loans you must mortgage a property where the property documents state you are the owner. You can avail up to 75% of the property value as the loan amount. For example, if the value of the property is Rs. 25 lakhs you can avail up to 18.75 lakhs as a mortgage loan.
The interest rate may vary from other types of loan as LAP comes in the secured loan category. You will be able to benefit from the fact that these loans offer you the flexibility to repay the borrowed amount through EMI payments. The repayment tenure goes around 15 years. A better credit score will allow you to avail a better interest rate on your loan.
Applying for loan against property is easier and simpler nowadays as most of the banks allow you to submit the loan application online. To apply online you can visit your bank’s website or log in to your net banking account. Provide the relevant personal information along with the property documents. The bank varies your documents and you will receive a call from the bank’s executive for further processing of the loan.
You can also visit the bank directly or can contact the bank’s helpline number for applying for LAP offline.
Loan against property comes with an array of administrative costs. The verification process of LAP involves charges for the valuation of property, legal scrutiny and processing fees. While availing a mortgage loan you have to bear the following charges:
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