Loan Against Property: Advantages, Tenure, Eligibility and Documentation

Just as the name signifies, loan against property (LAP) is the sum of money that you can procure from a lender by keeping your residential or commercial property as a security. By assessing the market value of the property, the lender then decides upon the loan amount. Usually, the payment issued is 65% of the property value. However, there are other factors as well that are taken into consideration.

Belonging to the secured category of loan, this type assures that the borrower is capable of providing security in exchange for the money. So, here is everything that you must know about this type of loan.

Advantages of LAP:

There are several advantages that this type of loan provides, they are as follows:

Low Interest Rates:

Compared to other types of loans, this one is the most considerable one. Mostly because of its tendency of providing higher loan amount (based on the property assessment) at a comparatively lower interest rate.

No Boundaries on Usage:

There are several types of loans that can be used only for specific reasons. However, when it comes to LAP, there are no such restrictions. Whether you want to use the amount to expand your business or to get rid of personal expenses, it is entirely your call.

Longer Tenure, Lesser EMI:

With LAP, tenures are generally longer as compared to other types of loans. This makes the EMI amount to be as low as possible. Therefore, you wouldn’t have to compromise with your other expenses at all.

Eligibility Criteria for LAP:

Although the eligibility criteria may vary from a lender to lender; however, the basic requirements are almost the same. Here is how you can measure your eligibility criteria:

For Salaried People:

The minimum age of the person should be 25 years, and he/she should have a permanent job either in the government organisation or a reputed company.

For Professional People:

For those who are professionals, such as engineer, doctor, chartered accountant, architect, and more, the maximum age for applying is 65 years.

For Self-employed People:

Those who are running their own business and want a LAP should be regular taxpayers. Also, they should be running the same business for at least 3 to 5 years.

Documents Required for LAP:

The general list of documents required is:

Address proof

Identity proof

Income proof

Salary slip of 6 months for salaried individual

Financial statement of 3 years for self-employed individual

Bank statement of 3 to 6 months

Passport sized photograph

Property ownership documents

These documents may vary. So, it is recommended to search thoroughly with your selected lender before applying for the loan.

Tenure & Rate of Interest:

When it comes to these two factors, it is vital to search and compare to find the best of everything. Generally, you can get a loan against property for 15 years with an interest rate ranging between 12% and 16%.

LAP is one such loan type, if used correctly, can help you fulfil all your financial requirements. So, keeping all these factors in mind, it will be easier for you to make a decision now, isn’t it? Go on, research, compare and find the best one to suit your requirements.

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Created on Jun 15th 2018 01:54. Viewed 504 times.

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