Loan against property (LAP), also known as a mortgage loan, is a secured type of loan as you use your property as collateral. You can get an adequate amount of money which can be utilized in case of a medical emergency, funding for children’s education or business. You can avail 70% of the property’s value as a loan. It is very easy to get a loan against property and also the repayment process is very convenient with low-interest rates.
Some advantages and features of LAP are listed as follows-
- It is easy to get a huge loan without any hassle with the lowest interest rates as compared to a personal loan.
- You can apply for a loan against property for a residential property that you might have rented like a flat or house, or a property that you are currently living in.
- You can also avail loan against property for commercial properties like shops, malls, etc.
- Loan against property is easily obtainable for a salaried individual or a businessman.
- The repayment time can be extended up to 20 years. Also, several EMI options are available, which can be very beneficial to repay the loan. It also makes it easy to repay the loan.
Factors affecting the interest rates for LAP are listed as follows-
- The length of the loan-
The loan tenure plays a key role in affecting interest rates for LAP. If you choose to repay it in a short period, then the EMI might be very high. Also, shorter tenure can be a risk to the lender. So the lender might charge high-interest rates.
It is easy to get a loan against a property if your credit score is outstanding. A credit score above 700 is considered good, and you can get your loan approved quickly with such a good score.
- The profile of borrower –
Age is also an important factor. It varies for salaried individuals and a self-employed person. You must be below 70 years to avail LAP if you are self-employed. And, if you are a salaried employee, then you must be below 60 years.
Eligibility criteria for LAP –
It is easy to meet the requirements of availing LAP. The criteria vary for different financial institutions. Some basic elements are –
- The borrower must be an adult with age over 21 years.
- The borrower must lawfully own the property
- The borrower must have a good credit score.
- The borrower should have adequate work experience and must be employed at the time of application.
Loan against property is a cost-effective solution to your financial problems. It is also very easy to avail. You can receive a considerable loan with the lowest interest rates. And the cost of the property that you will get will be more than the market’s value. So, it will always be beneficial for the borrower. If you are looking for a secured loan, then ensure to check for the lowest interest rate for a loan against property.