The loan against property is known as LAP as well and it is the best methods for sending your children overseas for studies or financing your company or kid’s marriage. The major thing to consider in such circumstances is where you will get cash from? There are several methods through which you can organize these loans against property by taking a home loan. You may go for an individual home loan against the amount that you require or go for an economical loan against property.
What Is Loan Against Property?
A loan against property is a loan which is paid or given against the property. It is given as a certain amount of the market value of the property which is generally between 40% and 60%. This loan is supposed to be to the type of properly secured loan where there is a guarantee given by the client who uses the property as a security.
The different requirements against which these economical loans are performed are as follows:
1. Development of company
2. Getting your children married
3. Sending your children for higher studies overseas
4. Financial support for your dream vacation
5. Financing medications
There is a variety of properties that one can mortgage for their loans. The loans can generally be taken against the self obtained home. It can be a piece land or a Living house.
Eligibility Criteria For Obtaining Loans Against Property
The criteria are something that depends on banks and NBFCs, although most commonly, the banks and NBFCs look at the following things:
1. Your income, debt responsibilities and cost savings
2. Market Value or cost of the mortgaged property
3. Reputation of pay back for other loans or credit cards
The rate of interest on the loan against property may starts from 12% to 15.75% with the tenure of the loan up to 15 yrs. The LAP is one of the best methods for increasing cash. If the borrower cannot repay the loan amount completely, the bank or Non banking Financial Company can possess your mortgaged property and this is the reason why the borrower should make their decision on his repaying abilities. The property loan is taken as it provides a lot of advantages; it is less expensive than a personal loan that is usually released at 16% to 21% Interest Rates.