Loan Against Property
You might have lots of plans and aspirations when it comes to financing your business, sending your child for higher education abroad or even your child’s wedding. However, the first thing that pops into your mind is “How would I get the money?” Fortunately, today there are several sources for getting funds to fulfill your dreams, and one of the most popular ways is to take a loan. From personal loans to loan against property in India, opportunities are splendid.
As rightly the name suggests, loan against property is a special type of loan offered against mortgage of your personal or commercial property. The loan is disbursed as a certain percentage of the market value of the property, which is typically 40% to 60% in India. Such type of loans fall under the purview of secured loans, where the borrower guarantees his property or asset as collateral to avail of the loan. This multi-purpose loan enables you to have funds in your hands, which you can use for different purposes. To put it simple, personal loan against property unlocks the core value of your property at your disposal.
Purposes to Apply for Loan Against Property:
Available at a reasonable rate of interest with easy repayment terms, the loan can be used for several purposes as mentioned herewith:
- Send your children for higher education.
- Renovate your home.
- Grow your business or start a new one.
- Fund your dream vacation.
- Get your children married.
- Fund your emergency medical treatments.
What more!! You can even get a loan against commercial property for emergency renovations, expanding the business or other fund requirements as may arise from time to time.
Features of Loan Against Property:
Loan against property is becoming extremely popular today to meet emergency fund requirements or fulfill your aspirations. Here is a glimpse of the key features of loan against property:
- Loans against personal or commercial property.
- Loan can be availed of by salaried & self-employed individuals.
- Get up to 40-70% of the market value of the respective property.
- Borrow loans against property starting from Rs 2 Lakh onwards based on your needs.
- Lucrative interest rates.
- Loan tenure up to 15 years for ease of repayment.
- Flexibility to opt between an overdraft or EMI based loan.
- Simple and fast processing of loan against repayment .
Advantages of Loan Against Property:
Wondering what are the benefits of taking a loan against property in India than availing a personal loan? The advantages of such types of loans as compared to personal loans are:
- Lower interest rates than personal loans: Being available on your property as security, loan against property comes with much cheaper interest rates than personal loans. Loan is available typically at an interest rate of 12% to 16%, whereas personal loans are available at 16% to 21% interest rates.
- Cheaper equated monthly installments: Since the rate of interests is lower from loan against property, the EMI for the same turns out to be much cheaper than personal loans.
- Higher loan repayment duration: The maximum tenure for LAP is up to 15 years, ensuring absolute ease of repayment. On the other hand, the maximum repayment duration of personal loan is up to 5 years only.
- Easy loan eligibility terms: The eligibility for personal loan against property is determined on the income of the borrower and market value of the property. Better your income and value of the property, higher will be the loan amount that you will be eligible for. On the other hand, personal loan eligibility is determined on the basis of your income and credit score.
- Simple documentation process and fast approval: LAP is a secured loan with relatively minimum documentation procedures and faster approvals than personal loans.
Compare Loan Against Property Interest Rates:
How to buy the best loan against commercial property or personal property? At PolicyBazaar we make it simple. Here you can review and compare the interest rates offered by different banks and financial institutions, and choose the best option that suits your requirements and budget. You can also compare the EMI offered by different banks for the same tenure, for making a smart decision.
Loan Against Property EMI Calculator:
Before applying for a loan against property in India, determine how much EMI you are capable of paying. With our advanced EMI Calculator online, simply mention your personal details and loan amount that you are expecting out of your commercial or personal property, loan tenure, and preferred rate of interest within the range. An approximate market value of your property can help us offer you the best EMI options.
Based on your information, our EMI Calculator instantly gets you the installment that you have to pay every month for your preferred loan amount and duration. However, you can re-calculate every time unless you reach the most suitable EMI amount.
What are the Documents Necessary for LAP Approval?
While the documents necessary for getting approval varies from bank to bank, the standard procedure includes:
- Duly filled loan application form with passport-size photograph.
- Residence and identity proof.
- Last 6 months’ salary slip for salaried individuals, and certificate and proof of business and income source for self employed professionals and businessmen.
- Last 6 months bank statement – self and business for self employed businessmen.
- Form 16 for salaried individuals and last 3 three years ITR and Profit and Loss and Balance Sheet for self employed professionals.
- Process fee checks.