Did you know your property can serve more purposes than just being a residential space for living or a commercial space for business? It can also serve as a hidden treasure that can help you in times of financial need.
A Loan Against Property (LAP) makes this possible. By using your property as collateral, an LAP allows you to access much-needed funds, while still maintaining ownership. But that’s not all. A loan against property offers benefits that can make it a better choice compared to other types of unsecured loans. Ready to discover more? Let’s dive in.
Exploring the Advantages of LAP
A Loan against Property (LAP) isn’t just about unlocking funds; it is about unlocking possibilities. Let’s get started.
- Larger Loan Amounts: The foremost advantage of LAP is that it can provide larger loan amounts compared to other types of personal loans. Because the loan is secured against a valuable asset, lenders can offer substantial sums, up to 60-80% of the market value of your property. This makes LAP an ideal choice for high-ticket expenses such as business expansion, higher education fees, or even major medical procedures.
- Lower Interest Rates: Since the risk for lenders is reduced due to the collateral, loan against property typically comes with more attractive interest rates. As per market trends, LAP interest rates can range between 9% and 15%, with the average hovering around 10.6%. The competitive rates make it a cost-effective solution for larger monetary needs.
- Long Repayment Tenure: An LAP offers extended repayment tenure, making it easier on the borrower’s monthly budget. Top lenders such as IndusInd Bank offer a repayment period of up to 20 years, allowing borrowers to manage their repayments comfortably without affecting their routine financial obligations.
- Flexible Usage of Funds: One of the distinct advantages of LAP is the flexibility in using the funds. Unlike a car loan or home loan, which must be used for a specific purpose, the funds from LAP can be used to meet any financial need, be it personal or business-related.
- Retention of Property Ownership: While you use your property as collateral for a LAP, you continue to retain the ownership of your property as long as you make your loan repayments on time. This feature allows you to leverage the value of your property without having to sell it. However, it must be noted that failure to repay your LAP may result in the lender taking possession of and selling your property to recover its dues under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.
Your Property, Your Wealth
In conclusion, a loan against property is an effective financial tool that lets you tap into the value of your property. By offering larger loan amounts, lower interest rates, long repayment tenures, flexible usage of funds, and retention of property ownership, LAP can conveniently and effectively cater to various financial needs. Whether you’re seeking to expand your business, fund your child’s education, or cover substantial personal expenses, considering a loan against property could be a strategic financial move.
The journey to financial prosperity might just be a LAP away. Get a loan against property, take the first step today!