Make a Smart Move & Tap Benefits of Loan Against Property
The New year 2020 is already here, and I am sure you are rejoicing in the hope of good things welcoming you. A New Year is an apt time for fresh beginnings. Whether it is going on an exotic vacation, renovating your home, or starting/ expanding your business, it is that time of the year, when you can begin anew.
With the power of financial planning, you can effortlessly fulfill every dream of yours. Thus, if you own property — residential or commercial, and need hold of substantial cash, you can consider Applying for a Loan Against Property.
Requirements for a Loan Against Property
The lenders offer this facility after creating an equitable mortgage against the property. To avail of this facility, there are individual requirements that you must fulfill:
- The applicants should be the owner of the property.
- The property must not be mortgaged, i.e., it should be free from any encumbrances.
- The property must not be located in a blacklisted location.
- Your credit score and credit profile must meet the requirements of the lender.
- It is a secured loan, i.e., the property must be mortgaged with the lender.
- The maximum amount available depends on the valuation of the property done by the official valuer of the lender.
Benefits of a Loan Against Property
Here is why LAP is an excellent product for availing of a high-ticket loan.
- High-value loan amount: As LAP is offered according to the value of the property, the maximum amount available can go into crores of rupees. Such high-value loans are extremely useful in taking care of any financial requirements. Usually, there is no upper ceiling on the amount you can avail, as the limit is at par with the value of your property. For instance, Bajaj Finserv Loan Against Property offers a maximum amount up to Rs. 3.5 Crore for self-employed individuals and Rs. 1 crore to salaried individuals.
- Extended repayment tenor: Another major benefit of availing a Loan Against Property is the extended repayment tenor. This facility allows you to choose an EMI amount that you can easily afford. It also reduces the chances of any default in repayments. You have the flexibility to choose the repayment tenor of up to 15 years. For instance, when you avail of an HDFC Bank Loan Against Property, you can repay your loan in over 180 EMIs, i.e., 15 years.
- Attractive interest rates: As it is a secured loan, the interest rates applicable against a Loan Against Property are amongst the lowest in the market. This is possible because the risk for the lenders is reduced with the collateral. Low-interest rates translate into affordable EMIs and reduced interest costs for you over the repayment tenor. Moreover, if you enjoy a good credit score, you get the benefit of further reduced interest rates.
- Freedom to use money: You are free to use the money that you have availed as a Loan Against Property. Whether it is a personal requirement or a business requirement, you can use money as per your wishes. The entire amount will be transferred to your account or will be offered as an overdraft; there is no restriction for you to seek permission from the lender regarding the usage of the money.
- Uninterrupted ownership of the property: Another useful benefit of availing a Loan Against Property is that you get to keep the possession of the property. The lender will only create an equitable charge against the property, i.e., you get to keep the property and use it as per your wishes as long as you repay your EMIs on time. Though, you can not sell-off the property unless you have repaid the entire loan amount.
- Quick approvals and fast disbursals: In case of a Loan Against Property, the risk involved for the lenders reduces manifolds due to the availability of collateral. As a result, the lenders are ready and willing to offer a loan in a quick time if you meet the eligibility criteria. This feature makes LAP an ideal option for you when your need is urgent, and time is short.
- Affordable charges: One of the other significant benefits of a Loan Against Property is the affordability of the charges. If you have availed a LAP on floating interest rate structure, you are free to make part-prepayment or foreclosure of the loan account without incurring any additional charges. This allows you to pay-off the loan as and when you have the necessary funds without worrying about penal charges.
- Easy application process: The process for a Loan Against Property is extremely easy as many lenders now support an online application for this. You need to fill a basic application form and upload scanned copies of your documents to initiate the loan process. For other formalities, the lender will get in touch with you and arrange for doorstep document collection.
With such noteworthy benefits on offer, a LAP is indeed an option worthy of your consideration when you require funds urgently. Though, it is essential to remember that since it is a form of borrowing, caution must always be exercised before availing a Loan Against Property.
