When you avail a loan from a bank or an NBFC against your property that you keep as collateral, it is called loan against property. This is a secured form of loan as a collateral is involved. The repayment guarantee is provided in the form of collateral by this borrower.
Often, individuals ask how much loan can they avail if they go for loan against property. Thing is, you must first know the value of the property that you are going to offer as collateral. The loan that you can avail depends on the value of your property.
Generally, banks and other lenders offer up to 65% of the property value as loan against property. You must also understand that every loan comes with a rate of interest. Different lenders offer different rates of interest with their loans. You will be charged an interest rate ranging between 12% and 16% with the loan against property.
The tenure of the loan will be 15 years. However, if you wish to get a clear idea about the tenure associated with your loan and the rate that you have to pay, you should talk to the bank or NBFC from where you are getting the loan. The tenure and rates may vary from one lender to another.
Often, individuals ask how much loan can they avail if they go for loan against property. Thing is, you must first know the value of the property that you are going to offer as collateral. The loan that you can avail depends on the value of your property.
Generally, banks and other lenders offer up to 65% of the property value as loan against property. You must also understand that every loan comes with a rate of interest. Different lenders offer different rates of interest with their loans. You will be charged an interest rate ranging between 12% and 16% with the loan against property.
The tenure of the loan will be 15 years. However, if you wish to get a clear idea about the tenure associated with your loan and the rate that you have to pay, you should talk to the bank or NBFC from where you are getting the loan. The tenure and rates may vary from one lender to another.
Uses Of Loan Against Property:
Loan against property or LAP is a great way to avail funds when you need to arrange money for any high expenditure. Find below a list of things that can be carried out using loan against property:
- Wedding
- Purchasing land, a new house, or a commercial property.
- Setting up your business.
- Medical emergencies.
- Studying abroad.
- Honeymoon, family vacation, solo travel.
Types Of Properties Against Which You Can Avail Loan Against Property:
The types of properties against which you can avail loan against property are mentioned below:
- Self-owned but rented commercial property.
- Self-owned commercial property.
- Self-owned plot of land.
- Self-owned but rented residential property.
- Self-owned and self-occupied residential property.
- Self-owned residential property.
Factors That Determine Eligibility For Loan Against Property:
Your ability to repay the loan, financial status, and the property value are some of the common things that are considered for the determination of your eligibility towards the loan against property that you apply for. Your current debts and all your savings are also taken into consideration for determining your loan against property eligibility.
Perks Of Applying For A Loan Against Property:
- Loan against property offers a long tenure and make EMI payments easy for you.
- When compared to a personal loan, you can avail a bigger amount with loan against property.
- Since it is a secured loan, the rates are much lower than any other unsecured loan.
Bottom Line:
It is extremely important for you to know your financial status before you apply for a loan against property. Compare various loans and pick the one that suits your needs the best.
