If you are looking for easy financial resources, the market allows you to choose from a plethora of options. However, when you are in dire need of cash in a small time period, you can always take out a loan against your property. Emergency cash situations can arise at any time. It can be to fund your child’s education or to bear the medical expenses of your dear one, or for the expansion of your business. Getting a loan in such a short period is not always possible. If you own a property, whether it is a residential one or a commercial one, you can always take up a loan against it to fulfill your needs.
The following are the numerous benefits and flexibilities that allow a loan against property to fulfill your needs.
Simple approval process
The procedure involved in availing loan against property is relatively simpler and hassle-free. Because this is a secured type of loan, the inspection and scrutiny that go under the application process are relatively straightforward and lighter. As the lender will be lending money by keeping your property as collateral, there is an assurance that there are fewer chances of default in the loan. This is opposed to unsecured loans where the risk factors are significant because of the absence of collateral. With that said, the loan against property documents required is minimum. You will have to submit your personal ID proof, address proof, as well as proof that the property belongs to you. There may be special documents required based on the lender.
Lower interest rates
Another reason why property owners take LAP is that the interest rate associated with such loans is lower as compared to your regular housing loans. If you have a commendable credit and repayment history, you can easily avail of a loan with a lucrative interest rate. The loan against property interest rate is quite low because it is secure type of loan. Flexible repayment tenure.
Depending on the loan amount, the lender may offer you repayment tenure ranging from 5 to 15 years, and even up to 20 years. The tenure you choose will depend on your loan amount, the lender, as well as the rate of interest. You should know that the longer the tenure, the higher will be the interest rate. But still, it is quite lucrative to have a flexible tenure that you feel comfortable with. And most importantly, you can repay the loan as overdrafts or in monthly installments.
While you will be taking a loan against your property, you will continue to retain ownership of your asset. In case, if you are unable to repay the loan, you are always allowed to sell your property and repay the loan.
A loan against your house or commercial property comes with an option of prepayment where you can close your loan amount even before the tenure ends, and that too without any penalties. This way, you can reduce the overall tenure of the loan and interest by paying a small additional cost. Having a loan against your property helps you in unlocking the hidden value of your asset. You can leverage the value of your property for satisfying your financial needs.