3 Things to Look Out for Before Applying for Loan Against Property

During financial emergencies, people look for borrowing a loan to cater to their urgent bills.  With various options in the market, borrowers can choose from a variety of credit options. You can choose between secured and unsecured loan products based on your needs.

However, obtaining a loan can be time-consuming, requiring detailed documentation, KYC, and other formalities. What if we tell you that there is an easier way out? Let us define Loan Against Property and some of its advantages for your perusal.

What is Loan Against Property?

A loan against property, or LAP, is a type of secured loan in which you can pledge your property in exchange for a loan.

Before we get into the specifics of applying for a loan against property, it's worth understanding how this type of loan works. A loan against property is an agreement in which the lender offers the money in exchange of a collateral in the form of the borrower’s property. The loan is secured. Keep in mind that the collateral property can be commercial or residential, and the borrower can continue to occupy it even after the loan is approved.

Also, the list of documents required for loan against property isn’t huge as you already have the documents pertaining to your property. Borrowing has never been easy, as now you can do it in minutes with an online LAP application form.

What to Consider Before Applying for a  Loan Against Property

A loan against property is considered an ideal loan for property owners because it is less expensive than a personal loan and offers large loan amounts that can meet various financial needs. However, before you apply for a loan against property, consider the following 3 points:

1.    Understand the Value of Your Property

The asset considered as the collateral in a loan against property is your property, which means that the loan amount offered is directly based on the valuation of your property. As a result, you must understand the value of your property before applying for a loan, taking into account factors such as its age, size, location, and amenities.

2.    Compare the Rates and Features Provided by Lenders

While several lenders may offer loans against property, their rates, features, and benefits will vary. As a potential borrower, you should research and compare the various loan against property interest rates offered by multiple lenders before settling on the one that best fits your needs. In addition, it is best to check the required documents for loan against property and whether they have an online LAP application process. Also check if the lender provides easy documentation, quick processing, and balance transfer, as these can assist in making informed decisions.  

3.    Duration of Repayment

Aside from the various loan against property interest rates offered by lenders, it is important to consider your overall repayment tenure. A reputable lender will almost certainly provide flexible tenure of up to 15 years. While a longer term means lower EMIs, a shorter tenure means higher EMIs that pay off the loan faster. So, choose your repayment period wisely.

Conclusion

As a property owner, taking out a loan against your commercial or residential property is a great way to get the financial help you need. You not only get a type of secured loan that typically disburses large loan amounts, but you also get to keep the property in question.

All that is required is a trustworthy lender who provides the benefits and features you need with their loan products. Poonawalla Fincorp understands your requirements and works strives give you the best value and benefits, such as quick processing with minimal documentation, flexible repayment terms with no foreclosure charges and much more.