Friday, 18 May 2018

7 Reasons Why Loan Against Property is a Great Option for You!

Posted by RaviKumar Nama
(Published on 18-May-2018)
If you ever need emergency funds, consider unlocking the potential of your property. Lenders offer loans against commercial, residential, and industrial properties. There are several reasons why Loan Against Property (LAP) are beneficial. We are posting 7 top reasons why the LAP is beneficial to the lendees.

Here are Seven Reasons Why Such Loans Are Beneficial

1. Secured facility

Because the property is mortgaged against the loan, the lenders are assured of recovering their dues in case of default. In comparison, unsecured loans depend on your credit score and may be difficult to avail of. Loan against property (LAP) being a secured facility is easily available.

2. No limitation on end use

You may use the borrowed amount for any legal purpose without any limitation. Lenders have no restrictions on the end use of these funds. Therefore, you may use a mortgage loan to fund higher education, medical emergencies, or to set up a new business.

3. Flexible repayment tenure

Financial institutions offer repayment tenure of up to 25 years. This ensures you are easily able to repay the loan without any financial difficulties. You may opt for a longer tenure to reduce the monthly installment. You must finalize the tenure based on your current and future financial situation.

4. Available for different properties

Lenders provide flexibility in the type of property they fund. You may avail of a loan against property for residential, commercial, and industrial properties that you own. The loan is also available against under construction properties, which offers you with flexibility.

5. Equated Monthly Installment (EMI) facility

The loan is repaid in EMIs, which are based on three factors. These include the borrowed amount, repayment tenure, and the loan against property interest rate. You may reduce your EMI by partially repaying a lump sum amount that decreases the principal. This helps you save your interest payout during the balance tenure while ensuring there is no prepayment penalty.

6. Top up feature

When you avail of a property loan, you may also use the top up feature. This facility is often offered by lenders to their existing borrowers. A top-up facility allows you to increase the loan amount with the same property used as collateral.

7. Affordable

Contrary to common perception, the mortgage loan interest rate is affordable, especially when compared to a personal loan as the former has a much longer tenure. This ensures you are able to avail of a loan at an affordable EMI over a longer period that does not cause any financial distress.

The EMI on your loan canbe paid online through an automated Electronic Clearing System (ECS) facility. The EMI amount is directly debited from your bank account on the specified date. Alternatively, you may give the lender post-dated checks towards the EMIs.

There are several benefits of LAP. It is recommended you browse online to find the different available options to make an informed decision and maximize your benefits.

Disclaimer:

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.


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