Reasons Why You Should Opt For Loan Against Property
Loans can be mainly categorized into two options - secured and unsecured. Unsecured loans do not involve pledging of an asset, and hence the financial institutions levy high interests due to risk factors. An alternative to the unsecured loans is the secured loans.
Loans can be mainly categorized into two options - secured and unsecured. Unsecured loans do not involve pledging of an asset, and hence the financial institutions levy high interests due to risk factors. An alternative to the unsecured loans is the secured loans.
Loan Against Property - Explained:
The LAP or loan against property is a secure loan in which you pledge real assets such as a residential home or a business plot that you own to make use of funds. Below are the reasons why LAP is an excellent option for meeting your financial requirements:
- Tenure: One of the most prominent factors that work in favour of the loan against property is the tenure, which can range from 10-15 years and can even go until 20 years based on the discretion of the bank/NBFC offering LAP.
- Affordable interest rates: Compared to unsecured loans, LAPs carry lower interest rates as the lending institutions consider these transactions to be low-risk transactions. You can use the loan against property calculator to find and compare the best rates in the market.
- Ownership: The borrower gets to have his/her claim on the property despite having pledged with the lenders. In other words, you can sell the property to settle the loans and have the rest of the funds for yourself.
- Top-up facility: In case your property value goes up during the loan tenure, you can also avail top-up facility with your existing lender.
Conclusion:
Since you also get to leverage your asset to avail funds without hurting your savings, loan against property is an excellent idea for your financial needs.
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