A Loan against Property or LAP is the loan disbursed or given against mortgage of the property. Whether you are looking forward to setting up a new business or want to expand an existing one, or if you want to go for a vacation or may be looking for a way to finance your child’s education, LAP is a preferred option when it comes to applying for loans. Basically a loan against property helps you fulfill your needs in the time of necessity. However, if you are having second thoughts about applying for a loan against property, take a look at these benefits-
• Secured loan
Loan against property is a secured loan and hence there are greater chances of it being approved in comparison to other unsecured loans such as personal loans, business loans or credit card loans. In the case of a loan default on an unsecured loan, the risk-factor of retrieving money becomes difficult for financial institutions or banks providing funds. Moreover, secured loans are excellent to improve the credit score. Also, it is easier to apply for. All you need is a property title and the relevant documents as an identity of proof to receive the loan.
• Serves your needs
The loan amount received against your mortgaged property can be used to fulfill your needs which fall under any legal demand. There are no such restrictions as to how you should utilize the funds coming from LAP. Usually people opt for LAP in situations that demand huge sum of money such as marriage, higher education abroad and medical emergency.
• Affordable EMIs
Loans against property are considered a great option in comparison to other loans because of its flexible tenure that goes up to 20-30 years. Since the tenure of the loan is so long, you get to pay your EMIs in small amounts. If you are comfortable with a larger loan amount and do not mind paying money in installments, then LAP is probably the best loan option for you.
• Comes with Top-up
When you apply for loans against property, it gives you an option to receive top-up funding. Top-up loans basically allow you to increase or raise your funds on the said property.
Taking all the above points in mind, if you think that you are comfortable with applying for a loan against property, it can be quite helpful and can aid you in achieving your dreams and desires without putting too much financial strain on you.
Manish Damani a financier by profession, loves to write during his spare time. He combines both his interests, by dispersing financial related information whenever possible. Through his work, he has provided information on the benefits of applying for aloan against property.