When we need money to meet urgent needs, the first thing we think of is a loan. However, some people find it difficult to decide which loan to apply for or whether a loan against property is a good idea. While some concerns may be justified, financial experts say that a loan against property is one of the most secured loans and carries a lower interest rate compared to other options. It allows us to use the value locked up in a property while continuing to occupy the property during the loan period.
LAP or Loan Against Property has a long repayment tenure that can stretch up to 15 years.
As compared to other unsecured products like Personal Loans, where the rate of interest is usually high, LAP has lower interest charges.
The longer the tenure, the lower the EMI. Since the tenure of the Loan Against Property is longer, the EMIs also gets reduced. Thus, bringing down the burden of the loan.
You can easily avail LAP as it is a secured loan type and banks are willing to provide the credit. If you have a property, you can mortgage it with a reputed bank to get loan for any business or personal needs.
A loan against property allows borrowers to use the money for various personal as well as business purposes, such as setting up ventures or expanding it to meet sudden medical expenses. This loan is also relatively easily available as lenders get a guarantee for the money they lend. It is in high demand because people get to borrow a large sum (up to 50 per cent of the property value), have flexibility over payments and the interest rate is lower compared to other loans. The loan repayment tenure can be long, resulting in lower EMIs.
Tax benefits can be availed on the interest amount for a loan against property and generally, lenders don't levy penalties on earlier payment of the loan amount.