Loan Against Property - Discover the Hidden Potential of Your Property
Through a loan against property, you can leverage your real estate assets and get access to substantial funds. With a lower interest rate, as compared to unsecured loans, LAP is a cost-effective means to secure funds for various business needs. Loan against property not only unlocks the value of your property but also secures your financial stability.
What is a Loan Against Property?
A loan against property (LAP) simply refers to a secured loan that is borrowed against a property. This is also known as a mortgage loan. This type of loan is convenient because, as a borrower, you can get easy access to capital without having to sell your property. You keep your property (private/ commercial) on the mortgage and avail of a loan against its value.
What are the Features and Benefits of a Loan Against Property?
A loan against property is a much-needed financial aid that can help you meet the awaiting financial requirements. The various features and benefits of LAP are as follows:
- High loan amount
Usually, the amount of LAP can range up to 75% of the value of the collateral property. This means you can avail a high loan amount depending on the valuation of your property. PaisaDost makes sure to evaluate the property as per the current market rates to let the customer enjoy maximum benefits. - The rate of interest
Compared to personal loan interest rates, the rate of interest of a LAP is low. This is because the lender has the security of collateral. At a lower interest rate, it becomes easier for customers to avail of this benefit. - Tenure for repayment
The repayment tenure can be as long as 10 to 15 years for LAP. Hence, you need not worry about a short repayment schedule. Also, the longer the repayment tenure, the lower will be the EMI. - Easy paperwork
Being a secured collateral loan, LAP usually does not attract hefty paperwork. With basic documentation and property details, the loan may be sanctioned to the applicant.
Table for Interest Rates and Eligibility
Check out the table given below that mentions the eligibility criteria for LAP:
| Particulars | Details |
| Age | 23-65 years |
| Nationality | Indian |
| Occupation | Business/Self-employed and Salaried |
| Minimum CIBIL score required | 670 + |
| Minimum income | For Self-Employed: Rs.30,000/ month For Salaried:- Rs. 25000/month |
| Loan amount | Minimum: 2 lakhs Maximum: 30 lakhs |
| Repayment tenure | Minimum: 1 year Maximum: 10 years |
Interest Rates
Take a look at the attractive interest rate offered by PaisaDost:
| Particular | Details |
| Interest rate offered | 15%*- 24%* per annum |
*Interest Rates are subject to change.
Things to Know When Taking a Loan Against Property
Before you borrow a loan against your property, here are a few things that you must keep in mind:
- Know your Needs – A debt is borrowed for a specific purpose. So, you first need to evaluate your financial need and your repayment capacity. Accordingly, apply for the required amount.
- Understand the LTV Ratio – The LTV ratio, which stands for the loan-to-value ratio, is an important factor to consider. You need to understand that no lender will offer you a loan amount that equals the value of your property. It can vary from 70% to 90%.
- Be Aware of Your Property’s Value – Depending on the location, age, amenities, locality, current market price, etc. the value of the property is decided. So, before your financial institution evaluates the property value, make sure you have an idea of it so you get the best deal.
- Check Eligibility – Meeting the eligibility criteria for LAP is a must. So, before you go through the application process, make sure to check the eligibility to avoid any hassle.
- Collect all the Documents – Certain documents, as aforementioned, are required for availing LAP. So, collect all the documents as specified before filing the application for LAP.
- Understand the Details of Your Agreement – A Loan Against Property is a long-term commitment. Therefore, before you sign the agreement, make sure you are thorough with the details. Make it a point to understand all the terms and conditions, especially the following:
- The rate of interest
- Repayment tenure
- Fees and Charges like pre-payment charges.
Documents Required
There is certain paperwork that has to be done. Here is the list of documents required to avail of a loan against property:
- Identity proof (Aadhaar, PAN card)
- Income proof
- Property documents
- Residence proof
- Business proof
- Bank account statement for the past 12 months.
PaisaDost may ask for any additional documents as well, depending on the need.
Why take a Loan Against Property from PaisaDost?
- PaisaDost is an ideal choice for your need for LAP
- Avail a competitive interest rate along with a range of financial services and benefits
- We offer the maximum loan amount against the property
- Flexible repayment tenure and repayment methods make us a reliable option for those seeking long-term tenure.
Over To You
The need for financial help can occur at any point, be it for the purpose of business expansion, higher education of your child, medical emergency, and so on. While there are several loan options available, if you have a property, getting a loan can be quite easy. The loan against property (LAP) has become a popular financial tool because of the competitively lower interest rates and lesser paperwork.
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Frequently Asked Questions
Is a loan against property a good idea?
Many believe that a loan against property is a much better option than a personal loan. LAP or loan against property allows more flexibility, lower rates, and higher loan amounts, making it a good option.
What type of loan is a loan against property?
LAP comes under the category of a secured loan. The property that you pledge acts as collateral.
What is the rate of loan against property?
At PaisaDost, we offer affordable interest rates ranging from 15%*- 24%* per annum, The interest rates can vary depending on multiple factors.
Is a loan against property the same as a home loan?
A loan against property is a secured loan that you take to fulfil your money needs. You own the property, and you pledge it as collateral. On the contrary, a home loan is a loan that you take to buy or construct a new house.