Loan Against Property: A Low-cost Option To Raise Your Money Amid Pandemic

The ongoing pandemic has adversely affected the income of individuals across the globe. In a difficult scenario like this, many people have turned towards loan against property for financial assistance. This secured credit option is available by pledging one’s property as collateral.

Nonetheless, individuals need to learn the advantages of this financial product to understand how it can help them in a scenario like this.

Advantages of a LAP

1. Competitive interest rate 

Leading financial institutions offer competitive interest rates on loan against property. This is because the property is kept as collateral which reduces the risk for lenders. 

2. Lenient eligibilities 

The eligibility criteria are lenient for eligible borrowers. These include: 

• Applicants must be citizens of India 

• The age bracket must be between 25 and 70 years

• They must be either salaried or self-employed and have a steady source of income. 

3. High loan quantum 

One can avail a substantial amount of funds with LAPs. The loan-to-value ratio can reach up to 75% of a property’s market value. However, it is best to use a loan to value calculator to gain insights on the same. 

4. Repayment tenor 

Financial institutions offer an extended repayment tenor for loan against property, allowing their borrowers to repay in affordable EMIs.

Borrowers can make use of the property loan EMI calculator and determine the monthly instalments payable by adjusting the loan tenor and rate of interest. They can find an instalment amount tailored to their requirements.  

5. Easy balance transfer 

Borrowers can easily avail loan against property balance transfer and shift their current loan to a new financier. This can help them enjoy a lower rate of interest. Furthermore, some lending institutions may also offer additional facilities with it. 

6. Nominal documentation 

It is easy to apply for a loan against property due to its nominal documentation. The essential documents that one must keep handy are: 

• KYC documents 

• Address proof 

• Latest salary slips 

• Property documents 

• IT returns 

• Bank account statements

Apart from this, one should also learn how to apply for this financial product.

How to apply for a loan against property?

One can apply for LAPs following the steps mentioned below: 

Step 1: Visit the website of your preferred lender and fill up the online application form for LAPs. 

Step 2: Submit the necessary documents asked and wait for the verification to be conducted. 

Step 3: The financer will assess the documents and property on legal grounds. After that, the loan amount will be disbursed. 

Considering the advantages of loans against property, it is fair to say that it can be an affordable financing option to meet every monetary need during this ongoing health crisis.