Loan Against Property
A loan against property is a secured loan that is sanctioned keeping an asset as mortgage with the lender. This asset can either be an owned land, a house, or any other commercial premises. The asset remains as collateral with the lender until the entire loan against property (/loan-against-property) amount is repaid. This type of secured loan can be an alternative for unsecured personal loans as it also
has no end-use restriction. However, the loan amount can be much higher and the tenure is also longer in this case. Loan against property interest rates (/loan-against-property-fees-and-interest-rates) are considerably lower as compared to any unsecured loan. You can use these loans for business purposes like purchasing machinery, buying raw materials, purchasing equipment, funding of working capital, debt consolidation, etc. This type of loan can also cater to personal requirements like wedding, higher education, home renovation, buying a new home, managing medical expenses, etc
Features of Loan against Property
- A borrower can mortgage their residential or commercial property while opting for a loan against property.
- The interest rate on a loan against property is decided considering various aspects of the applicant’s profile like their monthly salary, income details of self employed cibil score, amount taken as loan etc. As this is a type of secured loan, banks and NBFC’s offer lower rate of interest for a loan against property.
- This is a long tenure loan as the repayment period can go up to a period of 20 years. Banks and NBFCs offer higher loan amount for longer tenure with exciting interest rates as compared to other loan plans.
- The borrower is also supposed to pay the charges such as processing fees and administrative fees.
- The process of obtaining a loan against property is very quick and hassle free.
- Loan against property proves to be the best way for debt consolidation.
- That means you can pay off multiple debts by bringing them under a singular debt.
- You can use your mortgaged property while repaying the LAP unlike gold where the gold ornaments remain with the banks or NBFCs and you don’t get them back until the loan is repaid in full.
- If the property is owned by partners or directors of a company, then
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