Reasons Why is Loan Against Property a better option than other types of loans

1. Reasons Why is Loan Against Property a Better Option than Other Types of Loans? The right loan might make all the difference among loan options. A loan against property is much better than other loans like personal loans, home loans, or gold loans. Be it funding a business or managing personal expenses, a LAP has a lot of benefits. Here is why loan against property could be the ideal choice for you. What is Loan Against Property? A loan against property is a secured loan through which you can raise funds, mortgaging a property owned by you. It may be your residential, commercial, or industrial property. The lender advances loan funds based upon the value of the property at a lower rate of interest. Loan Against Property Eligibility Criteria For availing of a loan against property, you have to meet certain criteria for being eligible  You must be a property owner  Good credit score is necessary to get a good interest rates of Mortgage loan  Proof of regular income for salaried people and business income for self-employed  Eligibility Criteria differs from lender to lender but these are some common eligibility criteria.

2. What reasons make Loan Against Property better option than other loans? For this purpose, again, being secured by the property, unlike a personal loan or small business loan, the finance against property comes with a typically lower rate of interest. So, it will prove cheaper to borrow. Lower Interest Rates Mortgage Loans interest rates are lower than personal loans for which the interest is naturally higher since they are unsecured. This way, LAPs charge lesser interest rates because your property acts as a sort of security for the lender. That decreases the risk considerably and helps lower your EMI amount as well as total repayment amount. Huge Loan Amount Unlike small business loans or personal loans, a loan against property provides the facility of borrowing an amount much larger compared to other loans. Lenders generally offer loans up to 60-70% of the current market value of your property. This makes LAP an excellent choice when you need a considerable sum of money, whether it is for expanding your business or paying for higher education or funding a personal project. Not many entrepreneurs prefer small business loans, given that the money is significantly larger under a LAP. Even though small business loans checklist are helpful for everyday requirements, they come with a borrowing limit, which may not be suitable for higher monetary needs. An LAP presents flexibility, especially in terms of a larger monetary requirement. Long Repayment Tenure Another major advantage of LAP is an extended repayment term. Unlike personal loans, which are required to be repaid within 5 years of account opening, LAPs offer repayment periods ranging from 10 to 20 years. So, you get time to repay your loan comfortably and do not strain your finances too much. This also means that your monthly payments would not be too intense, allowing you to manage other expenses more effectively. Continuing Using Your Property One of the major benefits of availing against property loans is that you can continue to use your property even though it is mortgaged. The burden of sale for raising funds does not lie on you so that an important asset remains with you and the required finance is arranged at the same time. You retain both the ownership as well as usage rights of your residential as well as commercial property during the loan tenure.

3. Salaried and Self-Employed Eligibility Is it possible to get a mortgage loan without income? Yes LAP is an excellent loan option for both low-income salaried individuals and self-employed professionals. For example, the self- employed may be struggling with home loans or other forms of credit, but through finance against property, it can be made better by utilizing one’s property as collateral. Because the loan against property is secured by a valuable asset, lenders are more willing to grant bigger sums as well as good conditions. Lesser Processing Fees Compared to gold loans or personal loans, LAP usually incurs low processing fees. Due to this, it is cheaper for the borrowers, especially when they borrow larger amounts of money. Conclusion In short, what a loan against property is all about is that it provides benefits compared with other types of loans. With lower interest rates, higher loan amount, repayment periods, and processing fees, LAP stands good for anyone who wants substantial financing. Whether you apply for a loan against property in Alwar or any other place, this would be best for you in making the most of your property value while keeping up the flexibility in your financial planning. Frequently Asked Questions Q.1. Where can we use Loan Against Property? A loan against property can be used to fund business, education, health care, weddings or renovating your home. There are no regulations on the end-use of funds. Q.2. How to get the interest rate on loan against property? To avail interest rates for a mortgage loan, you should visit the website of a bank or financial institute. The lenders provide online calculators that can tell you how much you would have to pay in EMI every month with the value of your property. Q.3. How to calculate the monthly EMI on loan against property? You can also choose an EMI calculator given by a bank's website. You feed in the details about the loan amount, tenure of the loan, and the rate of interest charged, and you calculate your monthly installment. Q.4. What are some other types of loans if I do not have property?

4. Personal loans, gold loans, home loans, or small business loans are also available if you do not have any property. You have to, however pay a higher rate of interest with even lower limits on borrowing. So, in all respects, a loan against property offers numerous benefits-from lower interest rates to high loan amounts-and it is sometimes more favorable than other types of loans. Source Link: https://medium.com/@dadhichfinservloancompany/reasons-why-is-loan-against-property-a- better-option-than-other-types-of-loans-35490e9b8892