Property, whether commercial or residential, is forever deemed a potential investment.

However, do you know that you can also avail of a loan against your property when in dire need of funds?

This kind of loan facility allows you to mortgage your property and receive funds to fulfil your urgent monetary requirements. Also, when it comes to Loan Against Property eligibility, both self-employed and salaried people can apply for it.

Why get a loan against property?

A LAP or loan against property is a loan approved against property as collateral. A financial institution decides the loan amount and the loan against property interest rates after assessing the present market value of your property.

Usually, the lender provides around 70% of the property value as a loan that falls under the classification of secured loans, hence serving countless benefits. Mentioned below are some reasons why you must get a loan against property.

• The odds of receiving approval on a loan against property is higher than any other loan type. Because, in the case of a loan against property, banks or financial institutions hold collateral as a security that can get used for repayment if the borrower makes any default.
• A loan against property can also help you purchase a new property or restore or renovate the existing one.
• A Loan against property can also get used for personal expenses such as funding for a much-awaited foreign trip, your child's higher education or business purposes like working capital requirements or business funding.

Benefits of a Loan Against Property

To help you better comprehend the benefits of getting a loan against property over any other option, here are a few advantages of LAP you should know.

• Low-Interest Rates

Since a loan against property is a secured credit option, the interest rates are lower, ending in moderate EMIs and decreased overall economic burden.

• Long repayment tenure

 The loan against a property usually arrives with a flexible repayment duration that runs up to 15 years compared to a personal loan, and long tenure decreases the financial load on the borrower.

• Easy Approval

Given the availability of collateral as a security, a loan against property gets quickly approved compared to other unsecured credits.

Eligibility Criteria To Get A Loan Against Property

While every bank or financial institution holds some specific criteria when lending a loan against property, the fundamental requirements remain the same. Mentioned below is the eligibility criteria you must fulfil to avail of a loan against property.

• The applicant must possess Indian citizenship.
• When submitting the loan application, the applicant must be 21 years of age, and the upper age limit is 60 years in case of a salaried person, and 70 years in case the applicant is self-employed.
• A credit report with a minimum score of 750+

Documents To Be Submitted While Making a Loan Against Property Application

Mentioned hereunder are documents required for a loan against property.

• Duly filled and signed application form.
• Passport size photographs
• Photo Identity Proof
• Valid Property Deed
• Form 16 and past 3 month’s salary slip, in case the applicant is salaried.
• Last 6 month’s bank statement

To sum up, we can say that a loan against property is a better option when you require quick finance to fulfil your monetary obligations. However, before opting for a loan against a property, always ensure checking all the terms and conditions for hassle-free loan disbursement.