A Loan Against Property is a loan, which is given against a physical property. This can be both residential or commercial. This is a secured form of loan, wherein the property backing the loan has to be of substantial value and should be immovable in nature. The amount to be availed as LAP will vary depending on various factors like the credit history, collateral, interest rates and repayment schedule.
A LAP is a personal loan used to purchase property. The borrower uses their home as collateral in return for money generated from the value of the property. Depending on criteria, you can receive up to 60% of your property’s value for the loan. You pay EMIs over time at an agreed-upon interest rate. Compared to loans including a car or personal loans, the rate of interest for LAP (as well as other procedural charges) is lower among all.
If you have property, you too can avail this loan against property. As the name suggests, it is a loan where banks and other financial institutions provide money for your property against a lien or security on the same. The amount of money that you can get depends upon the property value of your home or land or commercial building.
6 Points to Keep in Mind When Applying for Loan Against Property
- Loan Tenure: The tenure of the loan is an important factor to consider when comparing loans. You may have a better deal if you opt for a longer tenure, given that the repayment of principal is spread over a longer time period. However, you may pay more interest in the long run if you choose to choose a shorter tenure loan.
- Amount of Loan: A physical asset is a better security for the loan and this ensures that a bigger loan amount can be granted. The lender will conduct due diligence and evaluate the property’s value before approving your application. Besides this, the applicant’s age, income, past payment history and credit rating score will be taken into account before disbursing the loan.
- Interest Rate: Lower LAP interest rates make this type of loan a better choice for borrowers. Low-interest loans are more affordable and can help borrowers to save on monthly payments. Not only will you enjoy lower interest rates, but you will be able maintain your monthly budget with low rates as well.
- Processing Time: The time taken in processing the loan is different from personal loans. Personal loans can be processed in 2 weeks but for LAP, due diligence has to be carried out on the property and its documents. There will also be an evaluation of the property’s worth in determining its current market value. This due diligence ends up extending the total time for processing the loan.
- Eligibility: Lenders who are willing to provide customized eligibility programs in order to offer the maximum loan amount are sure to be in a preferable position. These lenders should also be in a position to offer quality services after loan disbursal because the relationship will continue for up to 20 years. Such services include digital ones that can ensure convenience, speed and a seamless experience.
- Insurance: The loan provider should also provide an insurance cover as a rider to ensure that the borrower and his/her family are protected against any unforeseen or unfortunate event.The loan provider should also provide an insurance cover as a rider to ensure that the borrower and his/her family are protected against any unforeseen or unfortunate event.
Avail Muthoot Fincorp’s loan against property for your personal or business needs at best interest rates. Residential and commercial properties can be mortgaged for availing a loan against property. Muthoot Fincorp provides a quick & hassle-free loan against property to both salaried and self-employed person. Muthoot Fincorp’s loan against property is a simple solution to your urgent financial needs.
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