Imagine
that you are in need of extra funds to meet an emergency. You are calling
friends and relatives and they are not picking up your calls. Panic!
Generally, it is quite difficult to find monetary help in case of urgent need.
Again, a wise saying of life is that money and relationships should be set
apart. So, approaching a lender is the best solution to handle a financial
crisis. Now the question is – which financial product is most suitable for you
in times of financial crisis?
In
this context, let us discuss on loan against your property (LAP). Your property
has hidden potential power and you can unlock the same. Find out how –
The
Concept
As
the name suggest, loan against property means mortgaging your house, apartment
or land to avail the corresponding home loan. Availing home loan against
property is convenient and you don’t have to put forward any specific reason
for this. Whatever be it – marriage, https://www.loanvenue.com/personal-loan/children’s education, business expansion
or medical treatment – LAP is available in almost all the cases. With LAP, you
get flexible repayment options and reasonable interest rate. Here, the interest
rate is low to a personal loan. Multiple tax and insurance benefits are
associated with a loan against property.
Cooperative
Societies & LAP
Loan
against property can also be offered to residents of cooperative societies. In
this scenario, applicants from cooperative societies are required to furnish a
No Objection Certificate (NOC) from that specific society.
How
is LAP done?
1.
The
lender assesses the net market worth of property
2.
Then
the lender checks your credit history and determines your LAP eligibility. The eligibility
conditions differ from lender to lender. However, all lenders assessment is
based on some common factors.
3.
Generally,
the age limit for eligibility is between 18 to 60 years.
4.
Salaried
applicants have to furnish a Form 16, an identity proof, an income proof such
as passbook/bank statement reflecting previous past 6 months income.
5.
Similar
to salaried applicants, self-employed applicants have to submit identity card,
proof of income, IT returns along with computation for last 2 financial years,
a complete chain of property documents, partnership deed (if applicable).
6.
In
case of absence of Voter ID card; electricity & telephone bills are
accepted as identity proof documents
7.
The
applicants must furnish a signature proof
8.
The
sanctioned loan amount can be anything ranging between Rs 2 lacs to Rs 10
crores.
9.
Generally,
the loan amount in case of LAP is 60% of property value for residential set-ups
and 50% for commercial properties.
10.
Installments
of the loan can be paid through Post Dated Cheques (PDC) or Electronic Clearing
Service (ECS).
Tenure –
The
tenure for LAP is generally up to 15 years. However, if you have extra funds,
you can prepay the loan amount or repay the entire home loan earlier as per
your convenience.
LAP
VS Personal
Loan
There
exists a difference between personal loan and loan against property. In the case of a
personal loan, the interest rate is higher than LAP but you don’t have to keep
anything in the form of security. In LAP, the property is mortgaged in the form
of a guarantee to the bank. So, the applicant must be sure that he will repay
the installments on time, so as to save the property from falling into the
lenders’ pocket.
