LAP

Explore The Importance Of LAP Loan

A secured loan provided by banks, home finance companies, and NBFCs is known as a loan against property or LAP loan and is secured by either commercial or residential property. When opposed to personal loans or company loans, these loans are typically offered at cheaper interest rates and disbursed within a fair amount of time. 

Let’s Find The Usefulness Of LAP Loan

  • Even after receiving the loan, the applicant may continue to live in the home. 
  • The loan may be used for several things, including unanticipated medical costs, children’s higher education and marriage, or starting a business.
  • The loan against property interest rate ranges from 7.35 to 10.5 percent depending on the size of the loan and the bank of your choosing.
  • When you need money for personal or professional needs using an Asset such as a commercial or residential property, you can apply for LAP.
  • LAP is a cheaper option than a personal loan.
  • Although these loans are simpler to qualify for, they have lengthy and flexible repayment terms. It’s as simple as it gets with a fully digital process on LAP.

The Following Elements Are Taken Into Account While Determining Lap Eligibility In Typical Circumstances:

  • The applicant’s monthly income
  • The applicant’s age; the property valuation of the applicant’s real estate, whether residential or commercial
  • Existing Debt (if any)
  • Current employment history, prior employment history, and credit history of the candidate are used to determine credit worthiness
  • 100% compliance with the deadline for submitting the necessary financial papers

Also Read: Here’s How can LAP be used to consolidate debt?

What Are The Charges On Loan Against Property?

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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