How to get access to quick funds in financial problems?

Loan against Property (LAP) is one of the ideal ways to finance your dreams without worrying about selling your property.  Many times people need access to immediate funds for varied purposes in life. At this point of time, if you approach a traditional finance or take a personal loan you'll be incurred a higher rate of interest and not enough time for repayment. Borrowing from friends or family members would be against dignity.

Therefore, experts opine a Loan against property would be the best solutions for your financial concerns. Under LAP, the bank or non-banking finance companies promise to give you a loan by keeping your property as collateral. Since they can already quote a value of your property chances are you may get a large sum of loan easily. Hence this concept is gaining popularity in India. LAP really gains the edge over the competition due to its easy documentation process, speedy approvals and flexible repayment measures.

When you take a loan against property you can fulfill whole lot of financial goals such as sending kids abroad for higher education, starting up your own business, inventory set up for it, plan a foreign trip, construct a new home in native or you may use money to marry your son or daughter as well.

Whether one gets a Loan against property or not, depends on the borrower's credibility along with factors like income stability, age, qualification, number of dependents, spouse's income, asset, liabilities for existing debt and stability in job or business. Once the loan amount gets approved it will be disbursed in full or installment to your bank account as per your instruction to them.

The best part is today housing finance companies and banks are offering LAP at attractive interest rates starting from 8.50 to range at around 13% and a mere processing of 1-2% on it. Borrowers can easily pick his or her choice of interest between fixed or floating. You get a flexibility of part and prepayment of the loan. LAP offered to the borrower will be based on the market price of the property you're willing to pledge. However, one thing you have to keep in mind is that lenders will only sanction an amount of around 70-80% of the property value. So, whenever you're approaching for LAP ensures that you have enough savings to meet your purpose in full.

The key benefits of LAP could be termed as:

•    Higher Loan Limits

•    Competitively low-interest rates compared to another form of loans

•    Longer tenure and flexible repayments

•    The best tool for debt consolidation

•    Easy and speedy approvals

•    Suitable to meet both business and personal needs

LAP is a great way to get access to immediate funds. However, in the end putting your house at stake is a serious business, so it’s advisable to carefully compare the options of leading NBFCs and banks and then go for it. Compare apple-to-apple regarding interest rates, processing fee, other fees, loan tenure, disbursal amount, monthly installment, pre-closure charges, etc. and then  go for Loan Against Property. A genuine piece of advice: One should not use LAP as a form of risk capital but used it when you know you’re in good position to pay back the loan in the stipulated period.

3 reasons why a loan against property is better than a student loan.

Like most other things these days, the cost of education too is sky-rocketing. In fact, pursuing an education overseas or going in for an executive course such as MBA is something not all of us can afford solely on savings and our incomes. This is when reaching out for financial aid is probably your best option.

In such a scenario, most students opt for an education loan and though these loans are designed keeping in mind the needs of young aspirants, there is another alternative that’s worth considering and it’s called a loan against property. And to help you make a better-informed choice between the two, this article will highlight 3 major reasons why taking a loan against home or property is better than opting for a study loan.

1. A loan against property comes with better interest rates.
Probably one of the biggest things you want to look at when selecting a financial aid is the cost at which it is made available to you, in short, the interest rate applicable. Generally speaking, student loans come with interest rates ranging between 10 and 16 percent.

However, if you were to opt for a loan against property, you could enjoy significantly lower interest rates and better savings. This is because most lenders will provide you interest rates ranging between 9.50 and 11.60 percent per annum on a loan against property.

2. Longer tenures.
The tenures of a loan go a long way in deciding just how stressful or smooth your repayment journey is. Longer tenures mean smaller EMIs and easier repayments whereas as shorter tenures invite much higher EMIs and strenuous repayments.

With a student loan, you’d have a maximum of 10 years to repay your loan. However, with a loan against property, you can expect as much as 15 years to repay your loan amount. This means your EMIs will be spread across an additional 60 months resulting in much smaller EMIs.

You can even cut short the tenures by prepaying the loan as and when you are financially able to do so. This means you handle your repayment on terms you are more comfortable with.

3. Better funding.
Most lenders will provide you as much as 60 percent of your property’s value as the loan amount. This could work-up to quite a considerable amount of money considering the value of property these days. Availing similar loan amount through a student loan could require you to provide some collateral, probably in the form of life insurance or fixed deposits.

The only advantage a student loan has a loan against property is the moratorium period wherein you do not need to make any payments till you pass out or find a job, whichever is earlier. However, you must note that, even though you do not have to make any payments, simple interest will still be calculated during this period and this will be added to your principal amount.

So if you are in need of funds to pursue your further education plans, you should consider a loan against property. It’s a more affordable option that provides you the funding you need along with much easier repayments.