Loan Against Property
Loan against property is termed as a secured loan that is provided by the lender against the security of the borrower’s property. The loan is granted according to the current market value of the property. The property can be a flat, house, land, or any commercial premises, which is owned by the borrowers, and they remain collateral with the bank until the loan is repaid. In case you failed to repay the loan, the bank has the authority to sell the property to recover the amount as per the process. The lender can give loans to a salaried and self-employed person.
The approved loan amount and interest rate may vary depending on the condition of your property and annual income. It is a convenient option to finance all high expenditures such as business purposes, purchase raw materials, buying machinery, children’s education, medical treatment, etc.
Advantage of Loan Against Property
- It gives prepayment options toward the loan without penalties. These mean you can pay the small additional cost to reduce the burden of interest and tenure.
- The bank holds your property as a mortgage; the LAP interest rate is usually lower when compared to a personal loan or any other loans available in the market.
- As it is a secured loan, banks can easily give loans to borrower and you don’t find difficulty to avail loans.
- These loans are for long tenure that can up to 15 years, and long tenure help to reduce EMI.
Eligibility Criteria For Salaried
Age should be 21 to 60 years
Nationality should be Indian
You should salaried people in the public sector or any private sector.
Eligibility Criteria For Self-Employed
Age should be 21 to 65
You should have a regular source of income.
Document required for Salaried person:- Latest salary slips, Last 3- month salary statement, Aadhar card, Pan card, Address proof ID, Document of the property to be a mortgage, and Form 16/ ITR.
Document required for Self-employed:- Latest 6-month bank statement, Voter ID, Utility bill, Pan card, Aadhar card, Document of the property to be collateral, etc.
The LAP interest rate can be of two types- fixed and floating. As a floating type, the interest rate can be changed during the term of the loan and the fixed interest rate remains the same during the tenure.