Loan against property has emerged as a viable financial option for several individuals all over India. With access to higher amounts of funds than ordinary loans, individuals can finance their education, businesses, wedding, and much more. Nevertheless, several borrowers are missing the benefits of loan against property.
It is mainly because they do not possess adequate knowledge of LAP loan. Besides, being aware of the features and benefits of this financial instrument will prove to be economically advantageous. Therefore, one should know the distinct features of loan against property right away.
What are the features of loan against property?
LAP has several associated attributes that make it a significant option for financing. Moreover, the most prominent features of loan against property include the following –
- Access to higher loan amounts – Since, individuals have to collateralise their residential or commercial properties to avail this loan, they can access higher loan amounts. It is mainly because this financial option is secured by a property. As a result, lenders are significantly less apprehensive of borrowers defaulting on their repayment. Consequently, financial institutions issue an elevated amount of funds for recipients to fulfil their financial requirements.
- Affordable rates of interest – The primary feature of LAP is that it is secured. Therefore, individuals availing loan against house property benefit from lower interest rates. As lending agencies issue these loans at a competitive rate of interest, individuals encounter an easier repayment obligation. Besides, they can also benefit from lower EMI options owing to a substantial reduction of the interest component. As a result, they can manage their personal finances conveniently to fund their repayment capabilities.
- Flexible tenor – The tenor associated with this financial tool is typically flexible. This gives individuals the option to customise to determine the ideal tenure for loan against property. Most reputed lending agencies issue these loans for a tenor range between 2 years and 20 years. Therefore, individuals exhibit a comfortable repayment period for the finances they have availed against their property.
- Low prepayment charges – In case individuals want to repay their loan against industrial property earlier then the stipulated tenor, they have the option to save additionally. A handful of leading financial institutions usually charge affordable prepayment fees. As a result, individuals can reduce their financial burden by repaying a significant chunk of their loan early with minimal prepayment charges for this facility.
Therefore, this financial option is beneficial as individuals can save significantly on their property loan interest through these features.
What are the eligibility criteria for loan against property?
Various lenders follow different eligibility criteria guidelines. Individuals can access substantial funds against their property by meeting these requirements.
Leading financial institutions have the following criteria for eligibility to avail LAP loan –
- The age of salaried applicants needs to be between 33 and 58 years. On the other hand, self-employed applicants should be between 25 years and 70 years.
- A salaried individual should be presently employed in a reputed public or private organisation, while a self-employed individual should have a regular source of income.
- Applicants should be residents of India.
Besides, individuals who comply with the eligibility rules for LAP loan should also have a few documents in order. These mainly include –
- Proof of identity – PAN Card, Aadhar Card, or Voter ID Card
- Proof of address – The electricity bill, ration card, or driver’s license
- Proof of income – Salary slip, Form 16, IT Returns, bank statement from the previous 6 months.
With this set of documents handy, individuals can access a lump sum of funds to finance their requirements. Additionally, leading financial institutions issue loan against property up to Rs.3.5 crore. As a result, individuals can benefit from affordable interest rates and flexible tenors to repay their loan amounts.
These lending agencies also provide pre-approved offers for individuals on a wide range of financial products. These products mainly include secured financial instruments such as loans against property and home loans. Therefore, individuals can benefit from a hassle-free and timesaving approval experience. You can check your pre-approved offer simply by providing your name and basic contact details.
Therefore, LAP loans are a viable financial opportunity for individuals who require substantial funds. A competitive rate of interest, coupled with a flexible tenor, enables individuals to use loan against property for funding purposes.