Loan against property is a secured type of loan offered by lending and financial institutions for multi-purpose utilization while holding your owned property as security. The property owned by you is to be pledged as collateral for which you can obtain cash for up to 70-80% of the market price of the property. The major benefit associated with this loan is that you can continue using your owned property for any purpose.

People who plan to “Apply For Loan against property“ might have some questions to ask about this financial tool which we have tried to answer to clear all your doubts.

What is the difference between Loan against Home and Loan against Property?
However, home loan is also a secured loan provided by lending institution to buy a residential property but Loan against Property is a multi-purpose financial solution which is availed by pledging their property to access the funds for anything varying from funding your children’s higher education to the expansion of your business.

What are the benefits of Loan against Property?
A Loan against Property can be availed at lower rate of interest than any Personal Loan. Moreover, funds available with LAP are much higher than any other personal loan and can be availed for much longer tenure. It must be noted that interest rate and tenure of loan available to you depends upon number of factors such as monthly income, loan quantum, property evaluation etc.

In addition to that, lenders also charge a low processing fee on loan disbursed against residential or commercial property as compared to other unsecured loans.

What are the eligibility criteria for LAP?
The eligibility criteria for Loan against Property will vary from one lender to other but there are some common criteria. This loan can be availed by any salaried or self-employed individual and you can also add co-applicant as in close relatives, friends or partnership firms. The main applicant must be at 21 years of age and should be a resident of India. Also, you must earn a certain amount of salary that ensures your repayment capacity to repay the EMI payments.

What type of properties can be pledged?
There is common myth that a loan can only be secured in lieu of residential property but lenders offer loans on myriad of properties, including commercial or residential property. Even a vacant land that has not been constructed yet can also be pledged as security to get the funds. Depending upon a specific lender, a borrower can access about 70-80% of the market price of property when they “Apply For Loan against property Online“ or offline.

What paperwork is required to apply for LAP?
The documentation also varies from lender to lender and depends upon borrower whether he/she is salaried or self-employed. Generally, one needs to submit Identity proof, residential proof, salary slips as well as income tax return slips etc. moreover, lender might ask for credit report, balance sheets and educational qualification amongst documents. Keep all these documents in hand to get easy approval on Loan against Property.

Owning a house can be a boon in more ways than just acquiring an ownership. It not only provides you a roof over your head but you can also rent it out for passive income. One of the major benefits of your hard-earned property is that it can also help you to access large amount of funds for your personal needs. It will help you to arrange the funds at short notice when you need to spend it for some personal events such as a milestone birthday, child’s education in abroad or destination wedding and many more.

One of the instant and stress-free ways to arrange cash for these needs is to “Apply For loan against property“. A mortgage loan is a secured type of loan that provides you loan money against your property as collateral. The loan money is disbursed depending upon the different factors including the current market price of the property, debt to income ratio, your income source, repayment capacity and other eligibility criteria defined by specific lender.

A loan against property can be a best remedy to tackle all your personal expenses and events due to its unique and great features which are listed below:

Funds for any purpose: It is one of the major benefits of a mortgage loan that one has the flexibility to utilize the loan amount for different purposes. The mortgage loans in the lending sector are not limited to the specific purpose as they can be used for any of the activity. With the LAP, funds are accessed without any restriction on their usage. Generally, 60-70% of the market price of property is disbursed. However, with the good borrower’s profile, it could stretch to even up to 75%.

Flexible interest rates: The rate of interest is the key factor that influences the decision of taking a LAP. The rates may vary depending upon numerous factors such as type of mortgage you are applying for. Whether you “Apply For loan against property Online“ or offline, rates of interest can range between 10-20%. One can enjoy a smart loan against property interest rates that are flexible with a right credit profile and beneficial loan features.

Extended repayment structure: Unlike other loans, the duration of this type of loan is longer which could go as long as 10-15 years. Hence, you have ample amount of time to earn cash and repay the loan amount without any stress. Choosing extended loan tenure for loan against property helps to lower your EMI leaving you with additional money to spend on achieving other financial goals.

When you apply for a loan against property, you have to upload or submit some documents such as identity proof, income proof and property registration papers along with your loan application. The terms and conditions of the loan will be finalized depending upon the verification and processing of the loan application. It would be good for you to seek an advice from a financial expert to enhance your loan eligibility to get an easy approval on loan against property.