The market provides a large number of loans for someone in need of financial resources. Loan Against Property, or LAP, is one kind of finance that is quickly gaining popularity for its low-interest rates. If you are looking for high-value loans at low interest rates, then a loan against property is the best option for you.
What is a LAP?
LAP is a secured loan that can be availed with a property as collateral. It is beneficial to all individuals who need financial resources. Whether you possess a residential, commercial, or particular use property, it is an asset that may be pledged as security for a loan. Lender’s offer loans against property interest rate that ranges between 8.00% p.a. to 25% p.a.
Eligibility for a LAP Loan
- Residence: Indian
- Age Requirement: 21 years or older
- Age Limit: 70 years
- Duration of the loan: up to 15 years
The LAP loans can be used for the following purposes:
- To cover medical expenses in an emergency.
- To finance your child’s wedding.
- To pay for the long-awaited trip.
- To increase the size of your company.
- To assist you in financing your child’s education.
Following Are a Few Significant Advantages Of a Loan Against Property(LAP):
LAP loans have several benefits and flexibilities. Here are a few of them:
- Easy Approval
The approval procedure for obtaining a LAP is comparatively more straightforward. Since it is a secured loan, the scrutiny applied to loan applications is generally light compared to unsecured business loans, which carry a higher risk due to the lack of collateral. As a result, the screening procedure for the latter is lengthy and time-consuming.
- Longer Payback Period
LAP has an extended repayment period of up to 15 years, making it a popular loan option. Additionally, the borrower has the option of repaying the loan in equal monthly instalments or via overdrafts. The borrower’s account history, credit score, and property value overall determine the overdraft limit.
- Low-interest Rates
Compared to other unsecured stuff such as Personal Loans, which often have higher rates, loan against property interest rates are comparatively lower. For borrowers with a favorable credit score and borrowing history, the low-interest LAP may be the best option for various financing requirements.
- Permanent Ownership
The borrower maintains ownership of the property under loan against property. Therefore, if the borrower cannot repay the loan for whatever reason, they may sell the property and pay off the debt.
- Easily Accessible
Since LAP loan is a secured loan, you may obtain it quickly, and lenders are eager to offer credit. Ensure to mortgage your property to a reputed lender to get financing for personal or business needs if you own property.
These benefits contribute to the company’s development or safeguard the loan applicant’s and their family’s financial future. The primary criteria for obtaining a loan secured by real estate is that the loan is for a legal purpose.
Keeping in mind the significance, check out the best LAP offers by different banking and non-banking organizations. Hence, LAP is a secured loan that can be availed with a property as collateral.