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Different Types Of Loan Against Property In India

By Author: Aishwarya Mahurkar
Total Articles: 291

Loan against property in India is a specific and relatively uncommon loan. Therefore, most Loan Against Property (LAP) borrowers do not know that it is available in several packages. You can choose the most suitable one to match your needs. If you want to avail this loan for international travel, leisure or business expenses, you must know these details. So, you can select the most advantageous loan against property in India.


Term loan:


A simple home equity loan can be used to raise funds against the equity of the property. This type of loan is most common and most preferred choice in India. This type of loan has tenure up to 15 years. You can avail a loan up to 55 to 65% of market value of the property. This type of loan against property is available for self-occupied, rented, residential and commercial properties.


Property overdraft:


This type of LAP is a combination of loan against property and bank overdraft. The entire sum is not disbursed to the borrower. It is set into account and interest is charged on the utilised amount only. In addition, this type of loan attracts a higher rate of interest. Thus, loan against property interest rates are a vital factor while selecting the lender. A current account chequebook is issued to utilise these funds as per the borrower’s convenience. The principal amount is 60% of the market price of the property and tenure is up to 10 years. This type of loan is available against residential, commercial and industrial properties.


Loan against rent receivables:


This type is the loan disbursed against the future rental income. This type of loan is typically available against commercial and industrial properties. Tenure is up to 10 years while the principal amount of this type of loan against property is 50% of the market value. Rental income is assigned to the lender as EMI. This is a great choice for individuals, investors and builders with rental properties, loan against property interest rate will play a crucial role.


These different types of loans against property in India serve a different purpose. They offer different kinds of advantages. So, you must select the most suitable secure line of credit. But, take all aspects of the loan into account while putting the property up for a loan. Most people are driven by the loan against property interest rates. But, loan to value ratio (LTV), market value of property, terms and conditions, tenure, and EMI are equally important. Do not overlook these factors as they can affect the principal amount, EMI and other charges.

Author Bio :

Aishwarya Mahurkar is an experienced writer concerning the finance industry. Her articles help in informing her readers of the different types of home loan products such as loan against property interest rate, Home improvement / renovation loan, loan against property.

Total Views: 94Word Count: 478See All articles From Author

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