A loan against property is indeed a great way conjure up funds when you need them. However, there are numerous other finance options out there that would serve the same purpose, so why choose an LAP over them? Well, a mortgage loan comes with 5 big benefits that this article will explain so you can choose correctly when in the market for a financial aid.
1. Lower interest rates.
Interest rates are among the more important factors to consider when comparing your options. Higher rates mean higher EMI amounts resulting in more money escaping your pockets. On the other hand, a lower rate amounts to lower monthly payments and more peace of mind.
In this regard, a loan against property holds a huge advantage over finance solutions. Take for example a personal loan that will invite rates between 16 and 22 percent! Or, if you are thinking of financing your further education with an education loan, that will require you to pay anything between 10 and 16 percent per annum.
In contrast to both these financial solutions, an LAP comes with rates usually ranging between 9.55% and 11.70%, which is lower than both a personal loan and an education loan.
2. Get more funds with a loan against property.
If you are comparing loan options, it’s important to evaluate the loan amounts on offer. Personal loans usually do not provide more than 10 lakhs. An LAP on the other hand should fetch you up to 60 percent of your property’s value. Now, with property prices soaring, this should translate into a substantial amount of money and should cover most financial needs with ease.
3. Tenures.
Your loan should put your mind at ease, not give you sleepless nights each month. The tenure of loan plays an important role in deciding this. Shorter tenures equal much larger EMI payments and a repayment process that’s extremely taxing. In this regard, personal loan come with tenures that don’t usually exceed 120 months.
In comparison to this, an LAP should help you breathe easier with tenures of up to 15 or 20 years. The extra time will ensure you never have to stress about large EMI amounts.
4. Low or no prepayment charges.1. Lower interest rates.
Interest rates are among the more important factors to consider when comparing your options. Higher rates mean higher EMI amounts resulting in more money escaping your pockets. On the other hand, a lower rate amounts to lower monthly payments and more peace of mind.
In this regard, a loan against property holds a huge advantage over finance solutions. Take for example a personal loan that will invite rates between 16 and 22 percent! Or, if you are thinking of financing your further education with an education loan, that will require you to pay anything between 10 and 16 percent per annum.
In contrast to both these financial solutions, an LAP comes with rates usually ranging between 9.55% and 11.70%, which is lower than both a personal loan and an education loan.
2. Get more funds with a loan against property.
If you are comparing loan options, it’s important to evaluate the loan amounts on offer. Personal loans usually do not provide more than 10 lakhs. An LAP on the other hand should fetch you up to 60 percent of your property’s value. Now, with property prices soaring, this should translate into a substantial amount of money and should cover most financial needs with ease.
3. Tenures.
Your loan should put your mind at ease, not give you sleepless nights each month. The tenure of loan plays an important role in deciding this. Shorter tenures equal much larger EMI payments and a repayment process that’s extremely taxing. In this regard, personal loan come with tenures that don’t usually exceed 120 months.
In comparison to this, an LAP should help you breathe easier with tenures of up to 15 or 20 years. The extra time will ensure you never have to stress about large EMI amounts.
Generally speaking, a loan against property does not invite prepayment charges. This allows you to repay the loan in ways you are comfortable with and without worrying about penalties for closing the loan before the due date. In some rare cases, such as when you opt for fixed rates or have a firm as a co-applicant, prepayment charges may be levied but they are very marginal.
5. Quick and easy approvals.
In comparison to other loans, an LAP is relatively easier to avail. This is because the loan is provided to you against your property. This makes it a very secure loan and a lower risk for the lender.
These 5 big benefits of a loan against property make it an ideal way to arrange for funds when you are in a tight spot financially. We hope this article has given you a better perspective of these loans. Good luck and all the best!
