Loan Against Property or a mortgage loan is extremely helpful when you are going through a financial crunch and you don’t have enough cash to meet your personal and general expenses. In such a case, LAP becomes handy as it helps you to avail instant funds without the requirement of any collateral or security. Let’s have a look at how a LAP is beneficial to you:
What is a Loan against Property?
Loan against Property (LAP) is also commonly known as ‘mortgage loans’ in India. These loans are secured in nature as a borrower mortgage his own asset or property as collateral or security with the lender at the time of making a loan application. Doing this will lessen the risk of default on the part of a lender. If a borrower is unable to pay the loan back on time they have a right to confiscate your property until you pay back the loan.
The best part about these loans is that the loan amount taken can be used to meet any general or personal expenses such as opening a new business or venture, managing higher education expenses, funding your marriage etc.
Loan against property can be taken singly or jointly as per your current financial condition. You can also avail a loan with fixed EMI or as an overdraft facility. As an OD, loan against property can provide you with enough funds to meet all your emergency requirements. While loan against property has no upper cap on the sum of the amount you can apply for.
The loan amount you can take is decided by the lender itself as per the market value of the property and repaying capacity of the loan borrower. The loan-to-value-ratio or LTV in the case of LAP ranges from 45% to 90% of the market value of the property. The loan can be easily availed against residential, industrial and commercial property as per your convenience.
How one can have benefit from a Loan against Property?
1) Easy loan eligibility:The eligibility for the loan is determined by assessing factors like age, income etc. You can easily check the loan’s eligibility by visiting doing thorough research online or by visiting a bank’s website.
2) Choose the right lender:Before opting for a LAP, you need to compare and contrast different lenders and the rate of interest charged by them. This will help you in choosing the best deal for you.
3) Easy application criteria:The loan applicant needs to fill out an easy application form if he wants to avail a LAP. In the form, you need to fill details like your personal details, property details as well as professional details.
4) Hassle-free documentation: Documents required in case of LAP are minimum, so one can easily take a loan when you are going through a financial crunch in your life. Mostly, your lender would be asking for income-based documents to know your income.
5) CIBIL Score:You need to have a CIBIL Score of above 650 to avail a loan against property easily. If you have a lower credit score below than this, then you need to try to raise your credit score for future loan applications.