Do you want to grow your business but finding it difficult to arrange the fund? The best option for you to get a loan easily is to apply for a loan against property. It is a secured loan which has many other benefits and features which can help to easily manage big expenditures. People can also make use of Loan against Property Calculator for better results.
In this type of loan, the lender or banks offer you a loan against your property. The loan against property is mostly used by businessmen and self-employed individuals, but it is also available for the salaried individual, which they mainly use for personal purposes. It is available against both residential and commercial properties or a plot of land.
When Should You Opt For LAP?
In most cases, personal loans are preferable as they are easier to get and generally sufficient for the immediate need for money. But there few circumstances when a straightforward personal loan is not enough, in those situations you can apply for a loan against property –
- If you require a large number of funds to improve your business
- When you require financial support to fulfil the educational needs of your child.
- You can handle a sudden medical emergency with this type of loan.
- The money from these types of loans can also be used for fulfilling your dream of having a vacation abroad.
Benefits and Features Of Loan Against Property
There are numerous benefits and features that you must know before applying for LAP. It includes –
- The loan against property is different from unsecured loan like a personal loan. In case of personal loans, you fulfil certain criteria of the bank for being eligible. But in loan against property, the present of property and your income is enough to determine the amount of loan a person could get.
- The amount of loan available against your property is equal to 60%-70% of the present of the pledged property.
- The rate of interest in these types of the loan varies from bank to bank as it depends on the value of the pledged property, repayment period, amount borrowed, etc.
- The pledged property cannot be sold or up for any construction work.
- The repayment period for LAP varies between 15-20 years.
- The loan is only approved after the lender verifies your credibility—the borrowed amount directly credited to your account when the loan is approved.
- If your property fulfils all the eligibility criteria, you can even borrow an amount as high as 1 crore.
Documents Your Requires To Avail LAP:
The documents required for salaried and self-employed individuals are different.
Salaried individuals
The document required for salaried employee includes –
- Identity proof like Pan card, Aadhaar card and a residential proof
- Last three months salary slips
- An approved copy of form16 from your current employer
- Last six months bank statements
- A cheque as a loan processing fee
Self Employed Individual
The document which the self-employed person requires include –
- Identity proof like Aadhaar card, PAN card, etc. and a residential proof
- Last six months bank statements
- Past three years IT returns
- Valid business proof like partnership deed, qualification certificates, etc.
Thus, if you require a large sum of money instantly for different purposes than applying for a Loan against property is the best decision. Nowadays, it has become easier to apply for these types of loans, as most banks offer online application facilities.