#9 Advantages of Loan Against Property

Benefits of Loan against Property | Mortgage Loan 

In this era, availing of funds is an easy task, as there are a lot of options available in the market. If you move toward getting a loan there are many secured or unsecured loans available in the market. You can take any type of loan based on your requirement; the personal loan is an example of an unsecured loan whereas LAP (Loan AgainstProperty) is a secured loan. Loan against property is a type of mortgage loan, this loan is sanctioned against the Property as Collateral. Whatever loan amount sanctioned to you depends on the market value of the Property. Generally, the amount of loan offered to you is somehow lower than the market value of the property. Loan against property comes under secured loans and is one of the best loan options for both individuals and businesses. With LAP you can get higher education, reconstruction of the house, grow your business, and many more. Moreover, you will be surprised to know that there are lots of benefits of availing a Loan Against Property.

 #1 Easy to Process

Availing a Loan against property is one of the easiest methods to get funds. As the Property is secured option collateral or security, so it’s an easy process compared to another unsecured loan. Moreover, the documents required for taking the loan are minimum, so it is easy for the borrower to provide the documents required for the loan. So, it is one of the biggest advantages as the loan approval is easy and consumes less time.

 #2 Comparatively low Interest Rates 

 A loan against property or LAP is a type of secured loan, so the interest rates are comparatively lower than unsecured loans. Low interest rates lead to a minimum financial burden to the borrower and a low amount of EMIs. So, in terms of interest rates Loan against property is a good option for you compared to unsecured loans.

 #3 Availability of Huge Funds

The amount of loan in a Loan AgainstProperty depends on the market value of the Property. So, the amount available for a loan is higher as we know that nowadays property is very costly. LAP or Loan Against Property offers up to Rs. 5 Crores of loan which is a great way for getting a bigger amount of money without any issues.

 #4 Longer Tenure

When you go for (LAP) Loan AgainstProperty, it offers you a longer time period to repay the loan. Normally, the LAP tenure period can be up to 15 years which is comparatively very high than a personal loan. Personal loan gives only 5 to 7 years of tenure. Longer tenure periods result in a minimum amount of EMIs, thus creating a less financial burden on the borrower.

 #5 Use Various Properties as Collateral

 You can use various types of properties for taking Loan Against Property. These various types of properties include commercial property, self-occupied houses, pieces of land, and residential property as well. This flexibility offers a lot of options to use the Property efficiently. And the borrower enjoys the right of using the property for his own purpose.

 #6 Flexible use of Amount

 As if you take a car loan or home loan, you have to use the amount for purchasing a car or building a house respectively. But in Loan Against Property, there are no such limitations for using the amount. You can use the amount of loan for a wide range of purposes including marriage, home renovation, higher education, home construction, and many other purposes. 

 #7 No Pre-payment Penalty

 Loan Against Property offers you to pay the payment at any time without any pre-payment penalties or charges. This is also one of the greatest advantages for taking a Loan Against Property, but some lenders charge pre-payment charges so ask them while availing of a loan.

 #8 High Chances of Approval

 Whether you are a businessman or an individual, the chances of getting a Mortgage Loan are higher compared to other loans. It is because it is a secured loan, so the lender doesn’t require too many formalities to be completed by the owner. The lender just checks the basic parameters like minimum age, income, credit history, dispute-free property, etc. These basic parameters are easily fulfilled by an individual or business, so the chances of getting loans are higher compared to other loans. 

 #9 Benefits on TAX

 If you take Loan Against Property, Tax benefits can be also offered on this loan which is as follows:

• Section 31 of the Income Tax Act states that tax benefits can be availed on the interest amount for a loan against property. 
• Section 24 of the Income Tax Act states that if the borrower takes a loan against property for building a new house, then he or she is eligible for up to 2 lakhs of tax benefits on Income Tax.

So, by taking a loan against property the borrower will enjoy so many benefits compared to any other type of loan. So, if you have a property, you can use it for taking a Loan against Property to get funds for achieving your goals as well as many other benefits.

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