The Loan Against Property is a great financial tool because it is easy to use and serves as a useful source of financing. However, to plan your expense efficiently, you should know the various charges applicable on loan against property & its interest rates. (Checkout LAP interest Rate)

Charges on Loan Against Property:

• Loan Against Property Interest Rate

When the lender provides money to the borrower, an interest rate is charged. This is calculated on the total amount borrowed and until the repayment period. The Interest rates are calculated annually and then added proportionately to each EMI.

• Processing Fees

Also, known as application fees, this covers the administration costs, cost of carrying out credit checks and property appraisals, etc. The processing fee is a negotiable amount about which you can consult with your lender.

• Statement Charges

The lenders send you a hard copy of the principal amount, interest rate and loan statements for which specific charges are levied. You can avoid these by switching to online loan management.

• Penal Interest

After disbursal of loan, you are unable to repay the EMI or default on the loan, then a penal interest is charged. The interest is over and above the already mentioned interest rate and is calculated on monthly basis. So, it is important to plan your repayment.  

• Foreclosure Charges

If you want to pay off your entire loan at once, then some lenders also charge foreclosure charges. So, ensure that the loan you choose has a low foreclosure charge if at all, to make repayment simpler.

Conclusion

These are some charges on the Loan Against Property, that is why choosing the right lender is important. With that, you can void certain charges and reduce your financial debt.

Additional Read: Five Golden Rules to Follow While Taking a Loan against Property