Let your property take care of your needs. The rise in price for most of the thing increased the requisite of debt.Loan Against Property (LAP) refers to a multipurpose loan which can be obtained by mortgaging your existing residential or commercial property to meet the financial crunch. This loan puts funds at your disposal for crisis like education, marriage, dream vacation, home renovation, debt consolidation or even business expansion. Opting for LAP as a borrower, you will get financial assistance at very reasonable rate of interest and you can expend the amount for any reason.
This loan may be availed by Salaried, Self employed individuals, Partnership firms and Private Ltd companies. Banks have their own set methods to estimate the loan eligibility. However, it ranges from Rs.2 lacs to up to Rs.10 crores. The exact amount depends on your property valuation, income, savings, and existing obligations, credit history and of course repayment capacity. The age limit is fixed between 18 to 60 years. Normally the maximum loan amount can be upto 50% of property value for commercial setups and up to 60% for residential properties.
The loan requires simple documentation, principally an application form duly signed by the borrower, identity and residence proof, income documents; latest six months bank statement, documents to substantiate business existence as and when required and a processing fee cheque. The borrower needs to have a regular source of income to avail the loan. Though, the funds are offered against collateral security, the evaluation of your potential to pay back the loan amount in full is obligatory. These days most of the money lenders are offering these finances online. Online application is less time consuming and gives the aspirants the ease of making the application while sitting in office or home without any hassles.
Banks would offer you two types of interest rate namely, Fixed Rate of Interest and Floating Rate of Interest. Interest rates on this loan generally range from 12 per cent to 15.75 per cent. LAP is usually approved for a tenor of 15 yrs (180mths). The borrower can choose to make the repayments either through Electronic Clearing Service (ECS) or Post Dated Cheques (PDCs). A customer can always pre pay a part loan or repay the entire loan any time during the tenor based on the lenders norms for the same. For most of the lenders there are prepayment penalties to be paid if the loan is closed before the full tenure.
Various banks, private financial institutions are lending money these days. If you are opting for loan against property make certain that you do a lot of internet surfing to avail the best and risk-free deal. At the time of finalizing make certain to check all the penalties & fees. There are certain benefits of availing such loans. The borrower gets the opportunity of building up a good track record with a bank by making timely payments. The customer can enjoy several kinds of tax benefits, many banks or lending authorities provide various other kinds of advantages such as the insurance benefits, a zero balance savings account etc. One must ensure that he keeps up with the payment. You should always remember that you have pledged the most valuable asset as collateral against the loan. A prospective loan borrower must not rush into things while availing a loan.