A loan against property (LAP) is exactly what the name implies a loan given or disbursed against the mortgage of property. Loan against property belongs to the secured loan category where the borrower gives a guarantee by using his property as security. Quick Form for Personal Loan in Delhi NCR.
The low rate of interest is possibly the most important selling point of LAP. Usually, the rate of interest can range anywhere between 10-14%. However, if you are looking for financing your home purchase, home renovation or even your child's education, home loan or education loan might work out to be a cheaper option. Opt for LAP only if you are unable to avail a purpose-specific loan like educational loan or home loan for some reason.
The loan amount of LAP usually varies between 40% and 70% of your property's market value. The exact loan amount can go up to several crore of rupees. For example, the maximum loan amount under LAP from HDBFS (a sister concern of HDFC Bank) is Rs 8 crore. Opt for LAP if you have a high-value property and the upper limit on other loan options is proving inadequate to meet your needs. Do not opt for LAP for small loan amounts as keeping your property as lien for a small loan amount does not make any sense.
The tenure of LAPs can go up to as high as 15 years, thereby giving it an edge over short-tenured loans like car loans or personal loans. Longer loan tenure translates into lower EMIs, which in turn increases your EMI affordability. For example, assume that your monthly income is Rs 70,000 and you are availing Rs.25 lakh loan at 12.5% p.a. for 5 year tenure. Quick Form for Personal Loan in Delhi NCR.
Unlike home loans or education loans, LAPs do not provide any tax benefits. While the interest paid on education loans can be deducted from your taxable income, home loans come with annual deductions of up to Rs.2.5 lakhs for interest paid on home loans and up to Rs.1.5 lakhs for principal repayment. Thus, prefer education and home loans over LAPs because of their tax benefits.
As your LAP will be sanctioned on the basis of your property, the lenders require time to verify all property-related documents and carry out technical appraisal of your property before disbursing your loan. Apart from these, the lender will also ask for your income proof to judge your loan repayment capacity. All these analyses may require up to 30 days. Thus, opt for LAP only if your fund requirement is not extremely urgent.
Just like other loan options, LAPs also have processing charges. While most banks charge up to 1% of the loan amount as processing fee, NBFCs like Bajaj Finserve may charge up to 2% of the loan amount. In addition to this, there are also other charges like prepayment penalty (for loans lent at fixed interest rates) and penal interest charges. With all other factors being equal, it is important for you to compare these charges for selecting your best deal. Quick Form for Personal Loan in Delhi NCR.
Loan Against Property from Nationalised Bank: Canara Bank, Allahabad Bank, Andhra Bank, Bank of India, Bank of Maharashtra, Central Bank of India, Dena Bank,IDBI Bank, Jammu and Kashmir Bank, Karnataka Bank, Punjab and Sindh Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank, State Bank of India, Punjab National Bank and Bank of Baroda.
Loan Against Property from Private Bank: Bandhan Bank, Corporation Bank, DCB Bank, Federal Bank, IDFC Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, South Indian Bank, HDFC Bank, ICICI Bank, Yes Bank, Axis Bank, Kotak Mahindra Bank, Standard Chartered Bank, HSBC Bank, Deutsche Bank, Indusind Bank and RBL Bank.
Loan Against Property from Non Banking Financial Company (NBFC): DHFL Home, Indiabulls, Tata Capital, Bajaj Finserv, Capital First, Fullerton India, Aditya Birla Finance, LIC Housing Finance, Magma Fincorp, Reliance Capital and Tata Capital.
A loan against property (LAP) is exactly what the name implies a loan given or disbursed against the mortgage of property. Loan against property belongs to the secured loan category where the borrower gives a guarantee by using his property as security. Read More...
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A loan against property (LAP) is exactly what the name implies a loan given or disbursed against the mortgage of property. Loan against property belongs to the secured loan category where the borrower gives a guarantee by using his property as security. Read More...
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