Loan Against Property
Introduction
This is one of the easiest ways you can raise money i.e. by keeping your property (residential/commercial) as a guarantor for availing a loan. That means your own property helps you in getting a loan.
Loan against property is a secured loan. This is because a property is been handed over to that bank by the borrower acting as a guarantee. LAP is very secure as per customers point of view. It adds credibility to the customer. Because of that bank or any financial institute will not question the customer/client repayment capability. Real value makes LAP available at the affordable rates.
This is a secured loan so :-
- EMI is lower
- Cheaper Interest Rate
- Longer Tenure
- Maximum amount possible given as loan amount
The tenure of LAP is more compare to personal loan. Bank checks all the documents related to property that the borrower is providing for the loan. Properties that can use in LAP are mostly self-occupied or rented residential property. It can be a house or even a piece of land.
In LAP, ownership of that property which the consumer has handed over as a collateral, it always remains with that consumer, unlike in Home Loan in which the ownership is completely transferred to the Financial Institute/Bank. The consumer doesn't have to repay the whole loan to get the ownership. At any point intime, if the consumer is not able to repay the loan amount, he/she can sell the property accordingly. The amount that he receives by selling that land, through thatsettlement of the loan can be done. When the repayment of the loan is completed with thecharged interest the consumer gets his property back.
