Loan Against Property
1.Loan against Property (LAP) refers to a secured loan category somewhat like a home loan where the borrower provides guarantee by using his property as security. The right of ownership of the property is still with the borrower, and if for some reason, the borrower is unable to repay the loan amount, the property can always be sold off to pay off the debt.
2.The maximum loan amount varies from bank to bank and could range from Rs.2 lakhs up to Rs. 1 CR. The loan amount depends on the property valuation, your income and of-course your repayment capacity.
3.The maximum loan amount can come up to 80% to 100% of property value for commercial setups and up to 80% for residential properties (This is really variable as it completely depends on the valuation of your property).
4.The maximum loan tenure in Loan Against Property cases is 14 years.
5.Be ready to provide security, collateral or guarantors in order to obtain a Loan Against Property, not to mention a long verification process.
6.Most banks do not accept properties that are on lease or that are based on power of attorney.
7.The maximum age limit of eligibility is 60 years.
8.Loan Against Property features Fixed or Floating interest rates. You also have an option of changing from Fixed to Floating interest rates and vice versa once every year.
9.A processing fee is usually 0.05% to 3% of the loan amount and is payable upfront. This fee however will be deducted from the disbursal amount payable to you. We recommend that you tray and negotiate a 0% processing fee or at least a flat discount. Most bankers and agents will be happy to do this to ensure the loan gets sold to you.
10.You can also prepay the entire loan outstanding any time after 180 days of availing the loan. Pre-payment charges will be levied accordingly. If you intend to do so, please ask for the pre-payment amount to be waived or a reduction in the penalty charges.
11.You can also increase or enhance your loan against property eligibility. For that you need to show income of at least three persons, most preferably a family member or a business partner.
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Our Benefits
Borrowing a loan is one of the most ways of business financing. There are various reasons people can borrow loans; it can be to finance their businesses, school fees loan among others. In a situation where you have insufficient funds, the only solution for you is to borrow a loan. You can borrow a loan to either meet short-term financial needs or long-term. You can either borrow a loan from a bank, friends, family, and relatives. Take a look at various benefits of borrowing a loan.
Cash flow is To start a business, you need capital. It is not easy to get capital to invest in larger assets or projects.
Borrowing a loan is the only option that can help you handle such kind of businesses. The higher the capital, the more the
chances of a successful business. With the availability of cash flow, You can make multiple investments. Cash flow helps you
to start a solid foundation for your business and remain with the operating cash flow. The business will not be at risk of
falling due to lack of funds.
Every individual needs funds to grow their business. For you to be a successful entrepreneur, you need to get extra money to
boost your business. Getting a loan will allow you to make an extra move to expand your business. With the availability of
finance, you are in a position budget well and plan on how you will achieve your goals. By growing your business, you are
guaranteed of qualifying for higher loans depending on your income.
Loans are always flexible. The interest rates, the duration of the loan and the amount can be negotiated before the loan
is given. You can make adjustments even after the loan is given. You can plan on how to repay the loan and also request for
adjustments in case you need any. When you borrow a loan, you are in control of the whole amount. You can choose what to
do with it. No one can control you on how to invest your money.
Interest rates come banks interest rates are lower in that low-class earners can afford to secure a loan. Low-interest rates
encourage many borrowers. Borrowers can offer collateral as a form of security in case you default in payments; the bank
will be in apposition to repossess the collateral offered. Lower interest rates attract more customers.
The above benefits of Borrowing a Loan will build your confidence in securing a loan. If you repay well your loan, you will
have a good credit history and stand a chance of more loan. Borrowing a loan is important. It helps you when you don’t have
cash on hand and will are of great help whenever you are in a fix.
