apply loan against property

Things to Consider While Taking a Loan against Property

A loan against property is a great option to secure high-value funds at lower interest rates. The loans secured against high-value residential or commercial property offer up to 70% of the property value. Keep in mind the below things while taking a loan against property. 

Things to Consider While Availing Property Loan:

  • Keep Buffer Time

Enquiring about the loan disbursal time helps you plan the loan buffer time. This avoids stress due to uncertainty. Applying for a loan online quickens up the process.

  • Choose Shorter Tenure

Choosing a longer tenure reduces EMI, but the interest rates become higher. Choosing a shorter tenure helps save a good amount of funds in property loan repayments.

  • Keep the Papers Ready

Property documents are crucial for a mortgage loan. Keeping all the documents required for a mortgage loan together will help things go smoothly. It will also help to get the loan sanctioned quickly.

  • Take an Insurance

Take insurance for a higher loan amount to secure your property and reduce any risks involved. Getting insurance for a large amount can keep the loan covered during unprecedented circumstances.

  • Choose a Comfortable EMI

Calculating your monthly EMIs using a LAP loan EMI calculator helps you repay the loan without any problem. The loan against property calculator helps you choose the tenure and an easy repayment amount. Borrowing out of repayment capacity leads to late payment penalties that could be even more expensive.

LAP loans are hassle-free and offer the smoothest experience if you choose a good lending institution. The loan funds are also disbursed quickly and with utmost transparency. Apply for the loan online today!

Must Read: What are The Factors that Affect Loan Against Property Rates?

Need Funds for your Startup? Explore the Loan Against Property Option

The funding gap is a problem faced by most start-ups as there is a wide chasm between the number of funds needed and the number of funds available for such companies. While the fund needed is very high, funds are not so easily available. Such lack of funds often demotivate the owners of the company as they are unable to execute their ideas and visions. However, such a problem of the funding gap can be solved by using a loan against property or property loans.

How can a loan against property help?

A loan against property allows the start-up founders to obtain a loan against an asset that is lying idle. Since loans are secured by the property, the banks are willing to give a higher amount of loans at lower rates as compared to personal loans. A high-value property and a respectable credit score can allow you to obtain such loans easily.

Loan against property calculator also is less troublesome for the borrower as interest rates are much lower as compared to the personal loans. This allows for longer tenure loans as well as a reduced financial burden on the entrepreneur. The entrepreneur also has minimal restrictions regarding the usage of such money. A bank might restrict the fund usage in case of a car loan or home loan, however the same is not an issue in case of loan against property.

A loan against property can prove to be the white knight for a beleaguered company and startup. Apart from the lower interest rates, it allows the owner to concentrate on their business and steering it through rough waters.

Additional Read: Here’s How You Can Avail Tax Benefit On Loan Against Property?

FAQs

Do Indian banks/NBFC give a loan against property for doctors?

How does loan against property work?

3 Reasons To Choose Loan Against Property (LAP) During Times Of Emergency

Have a sudden financial crisis that needs to be dealt with immediately? Loan against property (LAP) can be the right option for you. Let’s have a look at a few benefits of choosing LAP in case of emergencies.

Financial issues are part and parcel of life and can happen with anyone. However, delaying your pre-planned idea due to lack of money is not a wise call, and you may even face the consequences in the long term. Hence, in such situations, you must consider taking a loan.

If you require a large amount with a long repayment period, a loan against property can be an ideal option. 

LAP (Loan against Property)

In case of LAP, you need to mortgage your commercial or residential assets to get the loan amount. Thanks to the multiple added advantages, the demand for LAP is growing like never before.  

Here are three key reasons for choosing a LAP as the primary loan option:

  • LAP is a secured form of a loan and poses a significantly lower risk for the lender. Therefore, the loan against property interest rate is lower than that of any other loan. 
  • Generally, you can sanction a large amount of money through LAP. As a result, if you are planning to expand your existing business or provide quality education to your children, LAP can do the job for you. On the other hand, you can extend the repayment period for up to 20 years. As a result, you will have enough time to pay back the loan amount. 
  • Thanks to the longer repayment period, the EMI for LAP is relatively lower than its counterparts.

Nonetheless, it is strongly recommended to hire a reliable lender to get the best possible result.

Must Read: 6 Things to Notice before Taking a Loan against Property for Education

Loan Against Property Without Income Proof: Is it Possible?

A loan against property or LAP is a loan taken against a residential or commercial property. The property value is assessed before the loan is sanctioned, and the percentage of the property value is given as a loan. One can check their loan against property eligibility online as different lenders have different terms. Make sure you do your research and choose a lender that you are comfortable with.

You must disclose what you are going to do with the money and how you plan to return it as a part of repayment. The loan amount could be anywhere from 40-60% of the property. This is based on the new assessment done and is 40-60% of the current market value. 

Now the tricky part

Getting a loan is difficult, as they will ask you for your income proof even if you are offering collateral. This can be tricky as the lenders need assurance about how you are planning to repay the loan.

  • You can talk to the relationship manager at the bank and ask if there is any other reassurance that you can give to procure the loan. You can offer collateral or tell them how you plan to repay the said loan in the future.
  • Another way to do this is to get a co-applicant. The co-applicant must have a good credit record and a valid proof of income so that the lender can see the EMIs coming in soon after the loan’s approval. 

Must Read: What Is The Difference Between Home Loan Vs Loan Against Property?

Benefits of a Loan Against Property

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The loan against property is a type of loan that owners of the property can avail for a large sum of money and easy low-interest repayments over 15 years usually. The loan against property is not as scrutinising as some other loans. Thus the easy approval loan against property eligibility, large sum and a more extended period of the repayments makes this a very popular loan in the world of real estate.

1. Monthly Instalments

The monthly instalments are divided in such a way that you will be comfortable paying them for years and will be deducted directly from your income. It also means that you can claim this while you are filing your tax return. You end up saving a percentage of your money by not giving it to the government. A deduction of up to 2 lakhs can be claimed every year.

2. Interest Rate

It does not matter whether your interest rate is high or low on your loan against the property; this again can be claimed in the income tax returns. Thus you will be able to save even more money.

3. Usage

It does not matter how you choose to spend the money even though this is a secured loan. This flexibility means that the loan can be used for multiple things. Whether it be to finance your business, go on a vacation or use it to buy another asset.

4. Property Type

Whether you have a residential or commercial property, it does not matter as a Loan Against Property can be acquired for both of them.

Must Read: Should You Use a Loan Against Property for Home Improvement?

Handbook on Loan Against Property

Loan against property is a credit tool that helps you leverage your property for funds. By collaborating with a reliable lender, applicants are assured of a high loan to value on loan against property.

Let’s delve into this further.

A loan against property can address your fund requirements from funding your child’s education to taking that dream business onboard. Although personal loans are a prominent option, here is a reason why you should choose a loan against property.

  • Affordable interest rates
  • No prepayment charges
  • Easily accessible
  • Flexible repayment tenure
  • Affordable EMIs
  • Minimal documentation

Lenders like Fullerton India offer its customers flexible repayment processes with affordable interest rates. Besides providing a high LTV, the overall process involves minimal documentation and hence is hassle-free. Using a loan against property calculator, applicants can decide a repayment scheme that best suits their repayment capability and financial capacity.

Hence the question arises: Which property qualifies as collateral for a loan against property?

You can use the following as collateral:

  • A self-occupied house
  • A land that you own

The property should be free from any legal complications, and there should be clarity on the title deed. Lenders sanction the loan amount after considering the market value, locality and several other factors.

Final thoughts

Loan against property is amongst the most accessible loans that one can avail. With the right lender, applicants can receive a high loan to value on the collateral pledged at affordable interest rates.

Must Read: 7 Factors That Affect Loan Against Property Eligibility Criteria

A Quick Guide To Loan Against Property


Loan Against Property
A loan against property is a loan that you can take from a lending institution against the property. You should be the owner of the property. However, if you not the sole owner then all the other owners of the said property, should be co-signers on the loan application form. So, let’s quickly look at the defining features of the loan:

There are eligibility criteria to be met

Every lender has eligibility criteria to meet for availing the loan against property, and it is different for salaried individuals and self-employed individuals.  You have to meet the age requirement, the educational qualification (for salaried individuals) and income requirements. If you are an SME, you are required to submit your ITR for two years.

  • You have to submit the documents asked for

Salaried individuals are required to provide three months of salary slips and Form 16. Self-employed individuals require VAT and Form 32. You will also be required to provide proof of identity, address,

  • You do not need to declare the end-use of the loan

You can use the sanctioned loan amount to meet any money needs ranging from paying for a child’s education to starting a new business. Always use the EMI calculator to calculate the EMI and loan tenure.

  • Defining features

You can get up to 70% of the value of your property as the loan amount. The loan property interest rate is lower than other loans, and it is dependent on type of property, income, documents, and credit history. Most lenders require you to have a minimum score of 700.  

These are just some of the features of the loan, but you must ask the lender’s representative for details before applying for the loan.

Must Read: What are the Essentials of Loan Against Property?