Mortgage

Top 8 Benefits of Choosing a Loan against Property

A loan against property is a loan that you can avail by keeping a self-owned real estate property mortgaged with a bank/NBFC. The loan amount sanctioned will be a certain percentage of the property’s market value, usually up to 70 percent of it. Here is how you can apply for the loan and know more about it – https://www.loanbaba.com/loan-against-property/
Below given are some of the benefits of a property loan.
Multipurpose Loan
A property loan can be taken for any monetary requirement. Many use the funds for marriage, business capital, medical treatment, travel plans, education, purchasing an asset, etc.
Secured Loan
This loan is secured, in other terms, it is a collateral loan. The bank will retain the property documents until the loan is fully repaid. A secured loan carries lot many benefits, such as eased eligibility criteria regarding credit score, existing liabilities, etc.
Top-Up Loan
You can opt for a top-up funding on an existing loan against property. Just like how you can take a top-up loan for home loan, the same facility is also available for the former. However, you must compare the rate of interest, other charges, tenure, and terms and conditions before taking a loan on an existing one.
Affordable Borrowing
A loan on property is affordable compared to an unsecured loan, such as a personal loan or a credit card loan. The interest rates are lower and the borrowing itself has several repayment options suited to your repayment ability.
Pre-Closure
You can prepay this loan without having to pay any prepayment penalty. Thus, you may decide to clear off the debt as per your suitability until the end of the tenure. LAP usually comes with a fixed interest, thus, you will know exactly the EMI amount to pay in total, and plan your finances accordingly.
Tenure is Flexible
Duration of loan is flexible. You can choose a short or a long tenure up to 15 to 20 years, depending on the loan amount and your repayment capacity.
Loan on Different Types of Properties
A loan against property is eligible on residential, industrial, and commercial property, but the same should be self-owned and free of legal issues. Such loan may not be available against an empty plot of land.
Overdraft Facility and EMI
There is a choice of both overdraft facility and EMI. The overdraft limit will be determined after studying our account history and property’s valuation.
How to Apply for a Loan against Property?
If you wish to apply for loans against property, you must compare the offers from top banks and NBFCs. What is the loan amount being offered? How much is the interest rate? What are the applicable charges? What are the eligibility criteria and how long will it take to disburse the funds? You have the choice to apply for this loan by visiting the financial institution or just switch to online application.
Most of the providers have free-to-use EMI calculator and loan eligibility calculator on their website so that you get an idea as to the total cost of the loan and instalment amount for every month till the loan’s maturity. Thus, compare the LAP offers and providers before applying for the loan with a financial institution.