Know About Loan Against Property, And Its Types
A loan against property, in short LAP, is a secured loan offered by pledging property as collateral. The property concerned can be a commercial space, land, or a house. As most lenders provide a considerable amount against a mortgaged property, borrowers can use the funds without any restriction. Based on the usage, lenders offer various types of loan against property.
Types of loan against property
Most leading financial institutions divide LAP into the following categories –
- Loan against property for self-employed
This type of LAP is available for businessmen and entrepreneurs with a regular source of income.
- Loan against property for employed individuals
Salaried employees are eligible to avail a LAP of Rs.5 crore, based on their personal, professional and property details. These substantial funds can be utilised to meet myriad expenses.
- Loan against commercial or residential property
To fund any financial obligation, borrowers can avail a handsome amount of funding against any commercial or residential property. Leading lenders also disburse this amount at a competitive rate of interest.
- Loan against property for education
Individuals can avail a loan against property for education to finance their child’s education at an affordable ROI.
- Loan against property for home renovation
Salaried or self-employed applicants can avail a LAP to renovate their existing residence. As an added benefit, borrowers can also use the property while mortgaged.
- Loan against property for debt consolidation
Individuals can opt for a LAP to repay their existing debts and save on EMI. As LAP comes with competitive interest rates and a flexible tenor, it allows individuals to pay cost-efficiently.
- Loan against property for wedding
In order to fund a wedding, individuals can also opt for a loan against property. It allows them to meet all expenses related to marriage comprehensively with a flexible repayment tenor.
- Loan against property for doctors
Doctors can avail a LAP to fund their medical expenses like renovating a clinic, buying expensive medical equipment, hiring staff, and others. As a medical professional, the eligibility criteria and documentation are less stringent, and they are also eligible for quick disbursal.
- Loan against property for chartered accountant
Leading loan providers provide LAP for chartered accountants at a competitive interest rate to meet their professional and personal needs. This fund can be used to open a new branch or renovate the existing office.
- Lease rental discounting
With this option, individuals can opt for a LAP against rentals. If prospective receives fixed rental at specific intervals, they can mortgage the property for a loan against competitive interest rates.
However, it is essential to note that the loan against property interest rates depends on various factors, such as the CIBIL score, location of the property, occupation of the applicant, and others.
But, before availing a LAP, most lenders suggest using a LAP EMI calculator. The EMI calculator gives a comprehensive insight into every financial detail concerning a loan. This includes the EMI amount, amortisation schedule and others. Besides, a loan against property EMI calculator allows prospective applicants to select an ideal tenor for them.
To avail property loan in a hassle-free manner, individuals can opt for the online procedure. The steps to apply for a LAP are mentioned below.
Steps to applying for a loan against property
Step 1: Visit the official website of the preferred lender.
Step 2: Navigate to the loan against property section from the products section.
Step 3: Fill up the online application with the required details.
Step 4: After successful submission, a representative from the lender’s end will contact the applicant for further details.
Step 5: Finally, submit documents to finish the online application.
In India, leading financial institutions extend pre-approved offers that simplify and expedite loan processing. Such offers are available on a range of financial products, such as loans against property, home loans, etc. You can enter your name and contact number to check your pre-approved loan offer.
An individual can choose a suitable option from the different types of loan against property per requirement. Borrowers can also avail multiple perks from LAP, including certain tax benefits.
