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Posted on Tuesday August 17th, 2021

Loan against Property is a financial tool that you can secure when you pledge or mortgage your property to the lender. It is a secured loan as far as the lender is concerned. In case you default on repaying on repaying the loan amount for any reason, the lender can retain the rights of your property. So, one should only pledge their property when he/she is sure to repay the loan.

Before you Apply For Loan against property you should plan your budget and save for long term financial goals that you can foresee. Besides all your planning, there are some uncertain situations which need to be addressed with additional funds. Let’s have a look to find out how Loan against Property can raise funds in some typical situations.

Education and Wedding Expenses: A higher education of your wards and their wedding are long-term financial affairs. You would normally plan them earlier in life and save up for it. There are specific loans offered by lenders for both higher studies and marriage. You can consider the fact that interest rates and repayment conditions on it are more convenient in comparison with these specific loans. You must be sure to repay the loan depending upon your income and saving.

Business Funding: You have to mortgage an asset when you avail a loan against property. As mentioned earlier, if you are unable to repay the loan, you could lose the right on your property to the lender. Therefore, utilize the loan money for purpose that is not too risky. That is why; it is good to secure this loan to expand your existing business rather than starting a new business as your business profits needed to be steady to pay off the loan easily.

Medical Emergency: As one’s age grows, medical expenses usually increase. The best way to plan this is to get a health insurance policy in your early age that can help you to manage the medical expenses later in life. But in case, you skip this step, there are high chances to shell out all your savings in tough times. Loan against property Online is not a best way to fund medical expenses but emergency but it can certainly help you out.

Down Payment for new Home: When you secure a home loan, the lending institution will only finance up to 80% of the market price of that home. The rest 20% will need to come from your pocket. If you are buying a luxury home, the down payment itself will cost into many lakhs. Generally, you should have saved for that but if not then you need to borrow somewhere.

You can also pick up a personal loan or loan against property to raise the funds but remember, the rate of interest on these loans is higher than the home which can result in a financial burden on your pocket.

At the end, you would see that LAP is a good option when you need to raise funds to fulfill your requirements but it is always great to compare all the available offers and finalize a calculated decision.