What is Loan Against Property?
As the name suggests, it’s a loan against your existing or pre-owned property. A loan against property is quite different from Home loans, as in a home loan you have to pledge the property you are looking to purchase as security whereas, a loan against property is a mortgage loan given against your pre-owned property. Moreover, it is a secured loan that is relatively much more affordable than both personal loans and business loans which are unsecured in nature.
Advantages of Loan Against Property
A loan against property is a mortgage loan that is provided by Banks, housing finance companies and NBFCs on your pre-owned residential property, commercial property. There are innumerable benefits of loan against property, that can help you fulfil your financial and personal needs. Loan Against Property serves different purposes for individuals as well for business, be it for higher education, dream wedding or vacation or for business goals like expansion, new inventory/equipment and even long-term working capital.
Here are some advantages of a loan against property that can help you in times of need.
Get a Loan at Lower Interest Rates: One of the most significant advantage of a loan against property is its Lower-Interest rates. Since a loan against property is a secured loan, hence the lenders provide these loans at a lower interest rate as the risk in case of a default is reduced. A lower interest rate translates to lower EMIs and hence making it pocket friendly.
Continued Usage of Property: The best part about mortgaging your property for a Loan is that you don’t lose ownership of your property even after you mortgage your property. You can continue to use your property, while it serves as a mortgaged property for your loan. You can mortgage different types of property such as self-occupied/rented out property that could either be residential property or any commercial space such as office buildings, shops, malls, complexes and more.
Partial Fund Disbursements: A loan against property gives you the benefit of partial loan disbursement, where you can get disburse a part of your loan amount and keep the remaining amount for a later stage. Partial Fund Disbursements is usually beneficial when you take a loan for construction purposes or for long-term working capital requirements, where the expense is incurred over a few years. You can take the disbursement of your sanctioned loan amount in multiple tranches as per your requirement. And the best part is you pay interest or EMI only on the amount that is disbursed.
Long Repayment Tenure: Unlike unsecured loans, you can get a longer repayment tenure while you opt for loan against property. It makes LAP (Loan Against Property) a lucrative option, as low-interest rates and long repayment tenures are what most of the borrowers wish. With smaller EMIs, this is one of the best advantages of a loan against property.
Higher Loan Amount: A Loan Against Property is a loan that helps you manage your big-ticket expenses be it for your individual or business needs. Since it’s a secured loan, you generally get finance up to 75% to 100% of the market value of your property. Being a collateral-based loan, it is available at lower interest rates and longer tenures which further adds to your loan eligibility and help you get higher loan amount sanctioned.
Apart from these benefits, there are various other advantages of loan against property.. Poonawalla Fincorp understands your needs and diligently works towards providing you with the best value and benefits like quick processing with minimal documentation, flexible repayment tenure at zero foreclosure charges, doorstep services and much more.
Wish to explore Poonawalla Fincorp Loan against Property offerings, check out our features and benefits, or feel free to get in touch with our executive for personalized assistance in your loan journey.
