Loan Against Property in India

Loan towards belongings is a model of private loans. This version of a personal mortgage is simple to get right of entry to, has an affordable hobby fee. However, a good way to get LAP (Loan towards assets), you need to put ahead of your own home as collateral. Once you try this, the bank or the NBFC will provide you with 60-70% of the current market value of that belongings s mortgage.

Putting your property as collateral doesn’t mean that you are not allowed to apply it however, you’ll be accurate on your promise of compensation after a certain time period. Otherwise, the financial institution is fully in their rights to take that property from you. There is no want to fear if you are suitable in your promise and the collateral will be eliminated after your whole compensation.

You would assume that the case of collateral behind those loans would possibly make people fearful approximately getting this type of mortgage. However, it’s far taken into consideration to be one of the most favored types of loans in India. It is favorable in this country for the following reasons:

It may be implemented for toddler’s marriage.
For expanding a commercial enterprise
For funding clinical remedies
For investment better research.
For holiday functions.

Benefits of Loan Against Property

LAP is considered the most favoured form of personal loans for the following reasons: 

1. The interest rate is surprisingly low: The main part of the LPA is collateral. Now collateral is a form of assurance to the bank that loan will be repaid after the given tenure. To that end, the bank also provides an olive branch by lowering the interest rates on LPA. The range of LPA lies between 12-15 percent as compared to the high rates of personal loans which are almost always around 15-25%. 
2. Close to no charges when it comes to prepayments: If you want the close the LPA by prepaying to the bank, you would not have to bear the charges for the prepayments. While it is not true for all the banks, you can expect the prepayment charges to be lower. 
3. Getting access to this loan is easy: getting access to this particular type of loan involves a lot less hassle than the others. It is mostly because most companies are pretty forward in providing LPA. 
4. The payback period is longer: Personal loans tend to have a smaller payback period. However, LPA is an exception with about 15 years given to pay-back the loan rather than the 7 years of the generic personal loans. 
5. You have to pay lower EMI: When it comes to LPA, the EMI is kept on the lower side. It is mostly because of the higher period of time it requires to pay back the loan.  
    

Eligibility Criteria for Loan Against Property

The eligibility criteria of getting access to Loan against Property are the following: 

1. Firstly, the property you are planning to put forward as collateral should have no outstanding disputes associated with it. 
2. You should be of Indian nationality. 
3. You should at least 21 years of age to fill the loan application. (this age factor may vary from bank to bank)
4. If you are a salaried employee, you have to have the salary of 25000 per month to get access to LAP. 
5. If you are a self employed individual, your annual income should be INR 5, 00,000. 
6. The lender will be getting a background check on you. Therefore, make sure that your credit score for the loan is good with other banking institutions. 

The above are the eligibility criteria. However, if you want to score a good EMI rate, there is a pro tip for you, make sure that you are good on your credit for that loan.

Required Documents for Loan Against Property

• If you are a salary man: 
  • You need an Identity proof which can be an Aadhar card, Voter ID card, Driver License etc. 
  • You will need the salary slip for the past 3 months. 
  • A form-16 issues by your employer(current)
  • Bank statement for the last 6 months. 
  • A cheque that covers the cost of administration and processing to the bank that is going to process your loan. 
• If you are a businessman(self-employed)
  • You need an Identity proof which can be an Aadhar card, Voter ID card, Driver License etc. 
  • Credentials related to your education. This entails certificates, degrees, diplomas etc. 
  • Income tax returns for the past three years.
  • Bank statement for the last 6 months. 
• If you are a self-employed professional:
  • You need an Identity proof which can be an Aadhar card, Voter ID card, Driver License etc. 
  • Credentials related to your education. This entails certificates, degrees, diplomas etc. 
  • Registration and licensing certificates related to your profession. 
  • Existent of your business profile. 
  • Balance sheets of the past 3 years including the profit and loss statement of the company. 
  • Bank statement for the last 6 months. 
  • IT statements (acknowledged) of the past three years. 
     

FAQs

Why should I apply for LAP?

What is the repayment period of LAP?

LAP has a pretty long repayment period. This period is of 15 years which is comparatively twice the time of other variants of personal loans, which is mostly of 7 years.