lap loan

Advantages of Availing Loan Against Property

A loan against property or LAP refers to a type of secured loan given to a borrower against the asset pledged as collateral. The assets that can be pledged to apply for such loans can include a house, commercial premises or owned land, and these properties remain as collateral with the lender until the payment of the entire loan amount. Borrowers repay the total loan amount at regular intervals in equated monthly installments (EMI). Below listed are the advantages of availing of LAP loan.

Benefits of Taking LAP Loan:

  • Repayment Tenures

The period for repayment of such loans is longer than other types. This allows the borrower to take loans of a higher amount to match their financial needs. 

  • Tax Advantages

One can enjoy tax deductions on taking such loans under section 37 of the Income Tax Act. However, the deduction can only be availed if the loan has been utilised for business purposes. 

  • Utilisation for Multiple Purposes

Such loans can be utilised for business or personal use. This flexibility enables borrowers to take loans as per their requirements. 

  • Lower Interest Rates

Financial institutions offer lower interest rates for these kinds of loans as these loans are secured against a property. This helps reduce the total amount paid at the end of the repayment period. 

The borrower must evaluate various factors such as the credit score, prior financial obligations, and debt to income ratio before availing of such loans. Now, with the help of a LAP EMI calculator, borrowers can pay the amount of EMI against the principal and the interest rates. These values can be adjusted as per the borrower’s convenience and ability to repay the amount.

Additional Read: Important Things to Watch Out While Taking a loan against property

What is a Loan Against Property, and how Much Can I Get?

Loan Against Property

The loan against property or the LAP loans, as the name signifies, are finances got by pledging a commercial or a residential property as collateral. The funds for these loans depend entirely on the property value pledged. LAP loans are secured and have lower interest rates than unsecured ones. One can avail loan finances up to 70% of their property value. 

LAP loans offer you up to ₹ five crores based on your property value pledged as collateral if you are looking for a high loan amount.

How much loan can I get?

Using a free online tool called the LTV calculator helps you know the maximum loan amount you are eligible for. Here’s a step-by-step guide to calculating the maximum loan amount one can get based on the property mortgaged.

Step 1: Enter the Market Value of the Property

Step 2: Enter the Nature of Property

Step 3: Enter Your Monthly Income

Step 4: Enter your Existing Monthly Obligations

Step 5: Select Interest

Step 6: Select Loan Tenure

The maximum loan amount you may be eligible for, along with the approximate monthly EMI for that loan amount and the total interest payable over the loan tenure, will be displayed automatically on the screen. It will help you make an informed decision and plan your loan finances accordingly.

Your property’s age, type, value and location, monthly income, credit score, and employment history play a crucial role in determining the maximum loan amount offered to you. Hence the calculator only displays the approximate amount you are eligible for.

Additional Read: Eligibility Criteria For a Land Mortgage Loan

Is it a Good Idea to opt for a Loan Against Property (LAP)?

Loans are mostly availed when we are confronted by emergencies or require immediate financial assistance. While several kinds of loans are available at our disposal, it is essential to consider the differentiating factors. Among such options are the loans that one can avail of against their property. Although there are particular concerns, financial experts state that it is the most secure form of loan and has a lower interest rate than other loans. 

Taking a loan against property allows you to use the money at your discretion. Much like a personal loan, there is no designated purpose for using the loan amount. However, a property loan interest rate is lower than its counterparts. You can use the loan to expand your business, medical treatments, or meet any other personal or business goals. 

Additionally, the loan provides substantial benefits like lower interest rates, an extended repayment tenure, and immediate availability of funds. However, the most significant benefit provided by a loan against property is the availability of using the collateral property continuously during the repayment tenure of the loan. Moreover, you can also avail of tax benefits while repaying the loan, and there is rarely any charges for foreclosing the loan.

The eligibility of the loan depends on the age, income and occupation of the applicant. A property loan interest rate is fixed by assessing and analysing the property’s age and location. 

Must Read: Major Factors You Should Consider While Taking Loan Against Property

Things to Keep in Mind When Taking a Loan Against Property

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A property loan is a secured loan wherein immovable assets like property or land is pledged as the mortgage. Here, the borrower must be the owner of the property.

A loan against property is a great way to finance hefty expenses. But many borrowers tend to overlook factors that play a huge role in a LAP’s affordability. These are as follows:

Things to Keep in Mind When Taking a Loan Against Property

  • Ensure that you take up the lowest possible tenure based on your financial standing. A lower tenure ensures that the amount paid in interests is as low as possible. 
  • Property loan interest rates are slightly higher than standard loans. However, borrowers need to negotiate for the lowest possible interest rate based on their credit card score. 
  • Most property loans have a processing fee attached to them. The fee is usually 1% of the amount borrowed. Therefore, when deciding to undertake this loan, make sure you have this amount ready. 
  • If you are in desperate need of funding, LAP’s can be tricky to navigate through. Unlike instant personal loans, a LAP takes 2-3 weeks for processing and disbursal. So, ensure that you submit all the requirements correctly and on time. 

Making a financial decision is a big deal, and it is important to ensure that you have all bases covered to secure your financial health in the long run. Covering all aspects of loan taking can enable you to pay off your debt much sooner. Get started now and find a lender that offers competitive interest rates and full transparency!

Must Read: All About Loan Against Property

All About Loan Against Property

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A loan against property is a collateral loan that You can avail against a property. The loans that are secured against property come with lower interest rates than the ones against collateral. Any immovable property that is residential or commercial can be pledged against the loan. You can apply for property loan here-

https://www.fullertonindia.com/loan-against-property.aspx

Features Of Loan Against Property

  • Eligibility Criteria

The eligibility criteria for a loan against property differs based on the lender. Most lenders check the borrowers’ repayment track record aka credit history, employment status, age, and financial stability before sanctioning the loan. 

  • Higher Loan Amount Sanctions

The lap loans have a higher loan amount as one is pledging a high-value asset. Most lenders provide a range of 60 to 70 per cent of the property value for the loan amount. The immovable asset can be land or commercial property like a shop or a residential property.

  • Longer Tenure

Since the loan amount is enormous, many lenders offer longer and flexible EMI payments. Some lenders stretch the tenure even up to 20 years since there is collateral involved. You can use the mortgage loan calculator to plan your instalments and decide on an apt tenure and a perfect instalment.

  • Speedy Sanction

Since the loans are availed against collateral, the sanctions are fast, and the loans are disbursed swiftly to serve the purpose on time.

Applying for mortgage loans online it brings an array of benefits to you. The loan process takes just a few steps, and the documentation is hassle-free as it doesn’t involve much paperwork. Apply for a lap loan with Fullerton India to get the best deals against property in India.

Must Read: Crucial Things To Know About a Loan Against Property

Crucial Things To Know About a Loan Against Property

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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

What is Loan Against Property- Its Checklist, Benefits?

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You may have heard of personal loans, home loans, and business loans, but a loan against property is also an important option you must consider. Here are some details regarding a LAP. 

What is a Loan Against Property? 

A loan against property (or LAP) is a type of loan wherein the vendor keeps the borrower’s asset with them as a mortgage until the loan is repaid. This is a type of secured loan, and may be used for properties like land, house, or other premises. 

Benefits of loan against property 

Here are some advantages of taking a loan against property: 

  • You can get a higher loan amount. 
  • The tenure may be longer, so you have more time to pay back the loan. 
  • Loan against property interest rates is also considerably lower when compared to the interest rates of other types of loans. 
  • Even though the loan provider may keep the asset with them for mortgage purposes, the ownership of the property remains with the borrower. 

Eligibility criteria and documents 

Here are some of the eligibility criteria and required documents to withdraw a loan against property:

  • The borrower must be a salaried individual or self-employed. 
  • A copy of the property documents must remain with the lender.
  • The borrower must share their bank account statements for a timeframe with the vendor.
  • Identification documents such as PAN or Aadhar card. 
  • Proof of address. 
  • Income proof to validate payback capability

Therefore, a loan against property is a pretty secure option if you’re looking to buy a house or commercial premises in India. 

Must Read: 5 Things to know before Applying for Loan Against Property

Steps To Follow While Applying For A Property Loan

property loan

Property loan is one of the oldest and most availed loans in India. The process is approved upon mortgaging the property. Usually, banks follow a process and provide credit according to the property valuation (50%-70% of the property value). A valuable property can help you avail substantial credit amount when you need it in the form of Loan Against Property. Lenders usually do not demand you to provide details of usage of the loan amount.

Top 7 Features and benefits of a loan against property are listed as follows:

  1. A secured loan allows quick processing of a loan
  2. The loan amount can be used without any specified end-use from the lender
  3. Rate of interest is significantly low
  4. Long tenures are allowed
  5. Ability to apply for top-up loans
  6. Hassle-free application process
  7. Flexibility in eligibility criteria of the borrower

Conclusion:

Loan against property is secured loans that take your property as collateral. It is often used to generate funds and pay off dues and medical bills. Being a secured loan, you need not pay high-interest rates. You can check your eligibility for a loan against property online. After getting the amount, you can use it to pay off your dues, make arrangements for a wedding, or buy a luxury item.

Must Read: All You Need To Know About Loan Against Property