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What is Loan Against Property?
Loan against Property (LAP) is a very unique product that combines the features of a personal loan and a secured loan. Additionally, this loan product assists in unlocking the value of your most precious asset: your Property. Unlike other secured loans, the end use of the loan is not monitored and does not come with a specific purpose. In this sense, LAP is an any-purpose loan while being secured by the collateral of your property.
This is one of the best tools for those looking at debt consolidation. Moreover, there are several businesses that have obtained high-cost funds, such as unsecured business loans, and have leveraged themselves to a greater extent. Consequently, this puts pressure on higher interest costs and lower profit margins. LAP, in this case, perfectly fits for such businesses, enabling them to reduce their borrowing costs and consolidate debt at a lower cost.
One of the key advantages of a loan against property (LAP) is its flexible tenor, which typically ranges from 7 to 15 years. This extended timeframe empowers borrowers to strategically plan business expansions and address other financial needs. Moreover, as the property appreciates in value, it can also cater to future requirements. This allows for the optimal utilization of the owned property while facilitating the raising of funds for diverse purposes. Additionally, a loan against property offers a lower interest rate compared to personal loans or home loans.
Characteristics of Loan Against Property (LAP)
• The Loan Is Secured In Nature.
• When compared to unsecured loans, the interest rates are low.
• Funds Can Be Used For Any Personal Or Business Purpose.
• Best Suited For People Looking For Debt Consolidation And Business Expansion.
• Quantum Of Loan Is High Depending On The Value Of Property.
• It Increases The Future Borrowing Capacity Along With Property Appreciation.
• The Loan Can Also Be Used As A Normal Overdraft Or A Dropline Overdraft (Depending On The Lender).
• The loan has a long-term nature, typically ranging between 7 to 15 years, depending on the use of the property (commercial or residential).
• This loan is available only to those who own a clear and marketable property.