A loan taken against the mortgage of the property is simply called “Loan against Property”. Believe it or not, it is one of the cheapest retail loans currently available today. The reason is pretty simple when you apply for a loan against property your loan is against a security. Remember, lower the risk it is for the lender, more customized the offerings can get.
Features and Benefits:
1. No need to sell the property:
Loan against property is a great way to raise finance at low-interest rates without actually selling the property. Such property can be continued to be used after the completion of the loan deal, depending on the type of loan.
2. Low EMI’s :
Loan against the property by its very nature of being secured offers the lowest EMI, only second best to home loans. Also, many financial companies today offer overdraft facilities as well.
3. Speedy Loan Approvals:
Unlike personal and unsecured loans, apply for Loan against property when you have a time constraint. It is the fastest way to get your loans processed due to less documentation requirement.
4. Higher Loan Amounts:
Loan amounts can range in between 60% to 130% of the property mortgaged. It all depends on the customer’s income history, credit score and other financial factors. The loan amount can be higher than personal and unsecured loans.
5. Low-Interest Rates:
The whole idea of giving security is to available larger amounts at a lower cost. By cost we mean, the cost of acquiring the loan i.e. Interest. Depending on the client’s credit history, credit score and other financial factors, Interest rates can be further lowered.
6. No Collateral Benchmark:
Whether it is a residential property or a commercial property, you can avail loan against the property by mortgaging almost any property having a market value.
7. Can fulfill all your dreams:
You can apply for a loan against property and raise money to cater various needs, either personal or professional. Since the loan is secured, the lender doesn’t restrict your intentions to spend the loan amount.
Normally, most financial companies follow a clear transparency policy where there is no hidden cost and all communication is up front at the time of processing the loan.
9. Benefits of being self-employed:
If you have an entrepreneurial zeal, you must also have a hunger for investment capital. Many financial companies today offer customized solutions and programs for aspiring, amateur and experienced entrepreneurs.
10. Seamless Debt Consolidation:
Normally, borrowers of unsecured loans look for a secured loan in near future to pay off their debts. Given the leniency offered under loan against the property to choose your own spending goals, LAP has become an attractive Debt Consolidation tool.
Above all, loan against property helps you better your credit score. A good credit score can further raise your chances of increasing loan amount, lower interest rates and avail an unsecured loan if required.