Why Should You Opt For Loan Against Property?

Most financial experts suggest loan against property as a better alternative to a personal loan. Let’s have a look at some of the reasons why you should consider this financial tool when you require funds. 

Why should you opt for Loan Against Property?

As the name suggests, loan against property (LAP) is a secured loan wherein the financial institute or lender lends capital to the applicant and keeps their property as collateral till the repayment of the loan. After the applicant repays the loan, the property documents are returned to them. There are some significant LAP types - loan against industrial property, loan against commercial property and loan against residential property.

What are the benefits of a Loan Against Property?

1. More loan amount: In the case of LAP, you can avail around 60-70% of your property’s market rate or value when you mortgage it. That means you’ll receive a substantial loan amount in contrast to what a personal loan offers. 
2. Low-interest rate: A secured loan reduces the lender’s risk and hence is available at a lower rate of interest in contrast to an unsecured loan such as personal loans. The rate of interest in case of LAP is generally about 9-15%, which is relatively lower in comparison to the 15-22% window charged in case of personal loans. 
3. Easy to avail: It is easier to get a LAP. Some of the standard loan against property documents required are proof of identification, proof of income, address proof, residence ownership proof, among others. The documentation, as well as the verification process, is easy, and the amount is disbursed quickly. 

Conclusion:

These were few benefits of LAP that make it an ideal choice among people who own some property. You can utilise your property while enjoying the advantages of LAP and paying convenient EMIs.

Additional Read: How to Consolidate Your Debt with a Loan Against Property?