Applying For A Loan Against Property? Here’s All You Need To Know
2 min read
Do you plan to pursue higher education or start a business? A loan against property can give you the necessary funds to fulfil your dreams. Well, you can also use the money to meet your emergency financial requirements.
What Is A Loan Against Property (LAP)?
When you take a loan by keeping your property as collateral, it is called LAP. You can also call it a mortgage loan. Lending institutions allow you to mortgage both residential and commercial property.
LAP Loan Interest Rates
The LAP loan interest rate generally ranges from 9% to 14% per annum. It depends on your lender. However, several other factors can influence your interest rate. The value and age of the property are crucial factors here. Moreover, the bank or NBFC will consider your credit score. A higher score can help you get favourable rates of interest.
What Is The Tenure Of Loans Against Property?
Lap loans are long-term loans. The tenure of these loans can go up to 15 years.
Advantages Of Loans Against Property
- The processing will be faster than housing loans. Banks take pretty long to process your home loan. However, mortgage loans get processed in no time. That is because your lender has security in the form of your property.
- If the value of your property increases over time, you can go for refinancing. It will increase your loan amount. This option is helpful if you are looking to expand your business.
- Your lender allows pre-closure of the loan without any penalty. So if your income increases, or you get enough money, you can repay your loan earlier.
Documents Required For Loan Against Property
Now that you know the benefits of LAP loans let us check the documents required.
You need basic documents like identity proof, address proof, and educational qualifications. However, proof of income is the most vital document. Apart from that, you need to submit all the papers of your property.
Your lender may also ask for your bank statement for at least the last six months. That will give them an idea about your ability to repay the loan. Keep all your documents ready before you apply for loan against property.
When Should You Apply For Loan Against Property?
Well, you can apply for a loan against property whenever you require a large sum of money. You may use it for any purpose. Here are some reasons for which you can take loans against property:
- For higher studies
- To manage your wedding expenses
- To go on a vacation
- To start your dream business
The Bottom Line
Loans against property come with a bunch of advantages. PNB Housing takes minimum time to process your lap loan. Moreover, they offer super flexible repayment options. So, hurry up! Check your eligibility for a LAP loan now.
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