{"id":1157,"date":"2019-01-09T12:11:02","date_gmt":"2019-01-09T06:41:02","guid":{"rendered":"https:\/\/homefirstindia.com\/?post_type=article&p=1157"},"modified":"2019-01-09T12:11:02","modified_gmt":"2019-01-09T06:41:02","slug":"loan-against-property","status":"publish","type":"article","link":"https:\/\/homefirstindia.com\/blog\/article\/loan-against-property\/","title":{"rendered":"What is Loan Against Property – LAP & Its Checklist?"},"content":{"rendered":"

All you want to know about loan against property<\/strong><\/h2>\n

A lot is going on in a person\u2019s mind when he has to send his kids abroad for studies or maybe when he has to plan a wedding or needs funds to invest in his business. The first (and scary) thought is: \u201cFrom where do I arrange all the money?\u201d There are some creative ways to arrange these funds\u2026like talking sweetly to your friends and relatives to convince them to lend you the money, but a better and self-sufficient way is to opt for a Loan Against (your) Property or Loan Against Property<\/strong> as it is popularly called.<\/p>\n

So what exactly is a Loan Against Property<\/strong><\/a> and do you make one fall into your LAP<\/strong>? Read our detailed guide below that explains everything about a loan against property. A loan against property is exactly what its name implies. We disburse or provide loans against the mortgage of a property. It is obvious that if you want to take a loan against a property, then you have to be the owner of a property, preferably a self-occupied residential property. You may even get a loan against commercial property like a shop or factory but this is less likely as most banks, HFCs, and NBFCs prefer to provide LAP against residential properties only.<\/p>\n

Loan Amount<\/strong><\/h4>\n

So how much money can I raise against my property? Generally, lenders provide a loan of up to 60% of the property value as a loan. This percentage is called the loan to value or LTV. The maximum tenure offered is 10 years. The rate of interest will be higher than a home loan rate but lower than the interest rates on personal loans.<\/p>\n

The tenure of 10 years that is offered for a LAP<\/strong> is higher than the tenure offered for personal loans which are likely to be a maximum of 5 years. This coupled with a lower rate of interest results in a lower EMI for the customer and hence makes a LAP<\/strong> more attractive than a personal loan. The funds can, of course, be used for short-term requirements like a marriage, college fees, hospital expenses, expansion of business, taking a vacation, etc. Some lenders offer
\nup to 15 years tenure which makes it even more attractive in terms of more affordable EMIs<\/p>\n

The loan against property<\/strong> can be availed by both salaried and self-employed persons. The evaluation process is very quick and the documentation is generally very simple<\/p>\n

Important factors to keep in mind when applying for a loan against property<\/strong>:<\/p>\n

Eligibility Criteria<\/strong><\/h4>\n

The eligibility<\/strong> criteria<\/strong> when applying for a loan against property<\/strong> are quite different as compared to that for unsecured loans (personal loans) where an individual\u2019s income shall decide the eligible loan amount. While the eligibility criteria for a loan against property<\/strong> vary depending on the lender, certain factors are considered by all. These include the applicant\u2019s income, his or her savings, and also their repayment track record. This repayment track record includes repayment of credit card amounts, previous loans, etc.<\/p>\n

The market value of the property is also taken into consideration. Besides this, the applicant\u2019s employment status, his or her age, and financial stability are also taken into consideration before sanctioning the loan amount. Usually, lenders prefer that their customers continue to be employed until the loan is paid off fully. This is why the maximum age-at-maturity of loan against property<\/strong> for a salary-earning individual is 60 years (this is the retirement age in India followed by most organizations). However, for businessmen and self-employed professionals, the age-at-maturity can be higher\u2026 say 65 years.<\/p>\n