Loan Against Property can be a blessing!


Here are some the points that highlight the benefits of loan against property!
No matter how much financial aid you need on emergency level or if you just need some extra funds to do more with your life, the option to take a Loan Against Property(LAP) can really be a blessing. So be it child’s education abroad, to host a fancy wedding ceremony for your child, a well-planned business expansion, funding the dream vacation you’ve been planning for so long or even if you need financial aid for any medical emergency. Indeed there will be an option to opt for a personal loan if the need is fulfilled with it. But if the need is greater, then it is suitable to opt for LAP as it serves comparatively more advantages than the personal loans.
The principle of loan against property works as same as mortgage loans but with some added benefits. Basically by keeping your property as a mortgage with the bank, you are provided with a loan amount that’s usually a certain percentage of the market value of the property. Usually, lenders provide up to 50% or 60% as the loan amount for an LAP. And since your property is kept as collateral with the bank, it is a secured loan and the lender would have the right to auction concerned property and recover the money, only if you fail to repay the loan. Here are some of the highlights that explain how LAP works wonders in the time of greater needs.

Quick processing:
Although it is not the only purpose it serves to aid urgent need, but the processing of loan against property usually takes less time and rather easy. Even banks are more than willing to provide these loans since it is referred to as a secured loan. And in terms of tenure periods, in the case of LAP loans offers longer tenure up to 15 years while comparatively personal loans usually go up to 7 years.

Lower Interest Rates:
Since bank as collateral security, banks can offer you lower the rate of interest in comparison with personal loan. The interest rate generally ranges between 12% and 15%, while in case of personal loan the interest rate ranges are 15% to 25%. Comparing the difference in the tenure period and rate of interest on LAP loans is a more favorable option.

Also, lower EMI tag:
You do the math, if you have the option to have longer tenure and the rate of interest is lower, the EMI of your loan will be much more affordable. This arrangement works in the favor for people who can’t manage to pay higher EMIs on their loans. Although, much like any other loan options you can prepay the loan or select shorter tenure as the rate of interest is low and also improves your credit score!
Some financial institutions also let you transfer your existing Loan against Property to their bank while offering you minimal documentation and quick processing and get a high-value top-up loan.
Despite the comparison, it is better to consult with consult with bank executive or financial advisors to know how much loan amount need from a loan against property or just personal loan is sufficient for you!


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