Why You Should Consider Loan Against Property

Loan against property (LAP) is a type of loan facility availed by individuals and businesses against the mortgage of a commercial or residential property. It is a secured loan, where the borrower pledges the property as collateral against the loan amount. Once the documentation required by the lender is completed, a borrower can have as much as 70% of the property’s value1. Depending on the lender’s policy, a borrower can repay the loan in a more extended period.

There are several reasons why one should consider a loan against property. Firstly, the interest rates on LAPs are generally lower than those on personal loans, credit cards, or other unsecured loans1. Secondly, LAPs offer higher loan amounts than other types of loans, making it an ideal option for those who require a large amount of money2. Thirdly, LAPs offer longer repayment tenures, which can be up to 20 years, making it easier for borrowers to manage their finances3. Lastly, LAPs can be used for various purposes such as home renovations, business expansions, or investments1.

However, it is important to remember that if the borrower cannot repay the loan, the lender can take possession of the property and auction it to recover the loan amount1. Therefore, it is important to borrow only what is required and make sure that the borrower can repay the loan as per the terms and conditions.