A LAP loan is a secured loan that you avail of against the value of your property. It serves multiple purposes which means that you can use the loan amount to cover the cost of a medical emergency, wedding, higher education, international travel, car repair, home renovation, etc. It enables you to secure up to 80% of the property’s value as a loan. Before applying for a LAP loan, here are the crucial things to know.

Crucial Things To Know About a Loan Against Property:

• Interest rate

Since it is secured, the loan against the property interest rate is significantly low. However, it would be wise to shop around and find a lender who offers the lowest interest rate. Also, if you wish to secure a lower interest rate, you need to convince your lender that you have a stable income and have maintained a healthy credit score. 

• Eligibility criteria 

Before applying for a loan, make sure that you meet your lender’s eligibility criteria. Usually, you have to be at least 21 years old and a salaried employee of a company to qualify for a loan. Also, you must show a minimum based on your lender’s policy. 

• Loan amount

Although you can get up to 80% of the property’s value as a loan, that does not mean that you should opt for a higher loan amount as soon as you see an opportunity. Assess your needs and choose a loan amount that you can afford to repay without any default. 

• Choose the right loan tenure 

Your loan tenure directly impacts your EMIs and your affordability. Use an online home loan calculator to determine a loan tenure based on the EMI you can afford to pay every month.

Must Read: 5 Rules to Keep in Mind while taking a property Loan