A loan against property (LAP) may be a secured loan provided by banks, housing finance companies, and non-bank financial institutions (NBFIs) against residential or commercial property. These loans are typically offered at a lower rate of interest than a private loan or commercial loan and are disbursed promptly. Such loans are available to anyone who owns a previously owned property, no matter whether or not they are salaried or self-employed during a business or professional setting. The loan amount sanctioned is additionally greater than that offered by other available options.
One of the foremost important things to know about LAP is that lenders only provide a particular percentage of the property’s market price. Banks typically lend between 50% and 60% of the property’s value. Other private lenders provide approximately 80% of the property’s value. LAP may be a secured loan because you retain the collateral with the lender.
Why Do People Apply For Loan Against Property?
Loan Against Property, like personal loans, are often used for a spread of purposes, including but not limited to:
- Paying your child’s school fees
- Any medical emergency is often funded.
- Going on a dream vacation
- Purchasing new machinery for a business or expanding an existing one
Features and Benefits of Loan Against Property
- Lower interest rate: in comparison to unsecured loans, secured loans typically have a lower rate of interest. Furthermore, if you’ve got an honest credit score and credit history, your chances of getting a loan at a low interest rate increase.
- Simple documentation and approval process: When it involves a loan against a property, the documentation and approval process is usually simple. during this case, the property wont to secure the loan is collateral. this permits lenders to proceed with an easy documentation process.
- Flexibility in loan repayment: Most loans secured by land have a versatile loan repayment term. counting on the lender you select, you’ll be ready to obtain a loan repayment term of up to twenty years.
- Continuous ownership of the property: within the case of a loan against property, the borrower retains ownership of the property. The ownership of your property doesn’t change once you offer it as collateral for a loan. This also gives you the choice of selling the property if you’re unable to repay the loan.
- Pre-closure option: you’ve got the choice of pre-closing your loan against the property if you would like to try to do so. If the loan you obtained features a variable rate of interest, you’ll not be required to pay any penalties for pre-closing the loan. If your loan features a fixed rate of interest, you’ll be required to pay a little amount.
- Optimal property utilization: If you obtain a loan and have a property that you simply offer as collateral, you’ll be ready to meet your financial needs with a loan amount that’s adequate to the worth of the property. At an equivalent time, you’ll be ready to keep your property. you’ll choose to not sell your property and still get enough money to satisfy your needs, and at a low interest rate.
LAP Eligibility Criteria
Criteria for eligibility for self-employed professionals and non-professionals:
- You must have a minimum annual income of INR 1.80 lakhs or more. you want to be a minimum of 21 years old when applying for a loan and no older than 65 years old when the loan matures.
- Your organization/business should are operational for a minimum of three years.
- For the last two years, your organization/business should have made consistent profits.
- Salary-earning individuals must meet the subsequent eligibility requirements:
- You must have a monthly income of a minimum of INR Rs40,000/-.
- You should be between the ages of 18 and 60 years old.
- You must be an Indian citizen.
- If you’re employed for a personal Ltd. or a partnership, you ought to have a graduate degree. there’s no such criterion if you’re employed for a public Ltd., a multinational corporation, the govt, or a public sector organization.
Documents Required for Loan Against Property
To be eligible for a real estate loan, you want to provide the subsequent documents:
- PAN Card, Aadhar Card, Voter ID Card are all acceptable sorts of identification.
- Passport, Aadhaar card, voter ID card, landline bill, registered rent agreement, driver’s license are all acceptable sorts of address proof.
- If you’re salaried, you want to provide proof of income within the sort of a statement and ITR forms.
- If you’re self-employed, you want to have your last three years’ ITR, profit, and loss account, and balance sheets certified/audited by a CA.
- Office address – ownership/lease/rent agreement/utility bill if you financed a billboard property
- Chain of Past Sale Deeds, Registered Sale Deed/ Conveyance/ Lease Deed
- Latest House Tax Return/ Receipt – Municipal Corporation Approved Building Plan
How to Apply for LAP
Follow these steps to use for a Loan Against Property with Home First Finance Company:
- Go to the product page by clicking thereon.
- Choose “Loan Against Property.”
- Fill out the shape together with your information. Please double-check that each one of the knowledge is correct.
- Enter your telephone number and email address precisely. Please confine in mind that each future communication is going to be sent to the address you provide, so please provide a telephone number and email address that you simply are currently using.
- Before clicking on “Submit,” carefully read the “Terms and Conditions.”
- Our representative will contact you to continue the method.
Published by Pooja Jain