Meeting Financial Needs with a Mortgage Loan against Property
Property (commercial or residential) is one of the most important assets of an individual. You can not only earn a steady rental income from the property every month but also avail a loan against it in times of financial trouble. Many property owners apply for a loan against property (LAP) to obtain funds for business or personal purposes. This is one of the most popular loan products provided by banks.
Borrowers prefer mortgage loan against property because it allows them to borrow a large sum of money for varied needs. From business and higher studies to medical treatment or marriage of son/daughter, loan against property is an effective option. This type of loan has easy documentation requirements. If you find a reliable lending institution, you can enjoy speedy approvals and flexible repayment options.
Key Benefits
• Interest rates on loan against property are lower
• It is an effective option if you own a property and wish to avail a large amount
• Tenure of such loans is longer, which results in lower EMIs
• LAP is an effective tool for debt consolidation
You can apply for this loan from a bank by extending the commercial or residential property as security or collateral. Ownership of the property will remain with you; however, it will be transferred to the bank in case you default on the loan.
When compared to other conventional loan products, LAP is a highly beneficial option, especially if you are looking for a large amount with a long repayment tenure. Most reputed banks in India accept commercial as well as residential properties for mortgage. The loan amount is determined on the basis of the property’s market value and this in turn, determines the EMI. Some lenders even offer overdraft facility to borrowers.
Who can apply for a LAP?
Self-employed individuals can also apply for a loan against property if they wish to set up a new business or if they are in need of a large amount of money. In such scenarios, they can opt for a large loan amount without selling or renting out their property. Their property will be kept on mortgage. Usually, the loan amount for LAP varies around 40-70% of the property’s market value. This is one of the most secure type of loans with a lower lending rate when compared to other options.
There are certain requisites to be fulfilled when you are applying for a loan against property:
• You need to have the property in your name
• If there is a joint application, ask for more details
• Most reputed banks offer this facility with different packages
• This type of loan can be applied to a property that is collateral
• Repayment term can be as long as 5-15 years
When applying for a LAP or home loan in Mumbai, make sure you choose a reputed lending institution. If you know of someone in your family who recently applied for the loan, ask them for recommendations.
Borrowers prefer mortgage loan against property because it allows them to borrow a large sum of money for varied needs. From business and higher studies to medical treatment or marriage of son/daughter, loan against property is an effective option. This type of loan has easy documentation requirements. If you find a reliable lending institution, you can enjoy speedy approvals and flexible repayment options.
Key Benefits
• Interest rates on loan against property are lower
• It is an effective option if you own a property and wish to avail a large amount
• Tenure of such loans is longer, which results in lower EMIs
• LAP is an effective tool for debt consolidation
You can apply for this loan from a bank by extending the commercial or residential property as security or collateral. Ownership of the property will remain with you; however, it will be transferred to the bank in case you default on the loan.
When compared to other conventional loan products, LAP is a highly beneficial option, especially if you are looking for a large amount with a long repayment tenure. Most reputed banks in India accept commercial as well as residential properties for mortgage. The loan amount is determined on the basis of the property’s market value and this in turn, determines the EMI. Some lenders even offer overdraft facility to borrowers.
Who can apply for a LAP?
Self-employed individuals can also apply for a loan against property if they wish to set up a new business or if they are in need of a large amount of money. In such scenarios, they can opt for a large loan amount without selling or renting out their property. Their property will be kept on mortgage. Usually, the loan amount for LAP varies around 40-70% of the property’s market value. This is one of the most secure type of loans with a lower lending rate when compared to other options.
There are certain requisites to be fulfilled when you are applying for a loan against property:
• You need to have the property in your name
• If there is a joint application, ask for more details
• Most reputed banks offer this facility with different packages
• This type of loan can be applied to a property that is collateral
• Repayment term can be as long as 5-15 years
When applying for a LAP or home loan in Mumbai, make sure you choose a reputed lending institution. If you know of someone in your family who recently applied for the loan, ask them for recommendations.
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