Loan Against Property: The best way to fund your dream goals

Your sister's wedding date has been fixed, you have planned a budget, picked on the guest list, however, all of a sudden there strikes a medical emergency in your home and you're short of 25 lakhs to fund the wedding as the money was diverted towards the surgery. You seek help from friends or family and only get around 12 lakhs and a personal loan can qualify up to Rs 9 lakhs. Still, you're short of a hefty amount of around 13 lakhs. Well, you might have ran out of monetary options, however, you remember there is a property inherited by your forefathers. Don't worry instead of taking a grave step of selling it you can opt for LAP (Loan against Property).

Well, in today's time leading banks and finance companies are offering loan against property at low-interest rates and flexible repayment options. LAP is one type of secured loan wherein you can apply for the money keeping your property mortgaged to the lenders. They offer you attractive interest rates compared to the personal loans and have certain eligibility factors for it. There are several advantages of LAP such as low-cost interest rates, ample tenure of around 10-15 years for repayment if your property value increases you can opt for a top-up loan, etc.

Compared to home loans, loan against property are offered to already own property so chances are if the property value is high you will get higher loan amount. You may opt for LAP to fulfill several purposes such as debt consolidation, wedding, education, foreign trip, build a home at your native, etc. The lenders will not inquire about how you're going to use the funds. The only drawback is you cannot avail tax benefits in loan against property.

Ideally, lenders sanction a loan amount of around 60-70% of the property value. However, some factors that lenders consider to for loan would be your income source, risk appetite, age, property value, debts, and their monthly installment and credit score. When you have stable income source and good credit score it puts you in a comfortable position to bargain for low-interest rate deals.

They will also check the repayment patterns and the ability to repay the debt. While availing LAP there would be fewer charges like processing fees, etc. so check thoroughly with your lenders. There are aggregator sites online wherein you can compare the loan amount and interest rate of leading private finance companies across India under a single roof. There won't be any pre-closure charges if you opt for floating interest rates, but if it’s a fixed interest rate then you will have to pay a certain amount. It’s important to note the longer the tenure you choose higher would be interest rate you pay, and lesser the tenure, less is the interest rate you shell out of your pockets.

It’s always a must to give a thorough read on the terms and condition before you sign on the dotted line. Loan against Property is your best companion during your rainy days of financial needs. Compare quotes and apply for LAP online, now!