What Are The Benefits Of Taking Loan Against Property?

By Author: Fayeem
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Our society is becoming more and more advanced everyday and with that, the standard of living is rising as well. In order to fulfill those basic needs, people are resorting to loans. Done judiciously and with proper consideration, a loan can really help you live prosperously. What is referred to as loan against property is basically a loan that is taken by pledging a residential or business space to the lending authority. Since it is a secured loan, the rate of interest is much cheaper compared to the personal loan.

Now, when it comes to availing the loan, you basically have two options: either you can go to the traditional banks or to the NBFCs (Non-Banking Financial Companies). The problem with banks however, is that they do not disburse the loan easily. For instance, if you apply for a loan against property in Delhi, you’ll first have to get your property evaluated by an agent from the bank in order to calculate its market value at the time. However, all this process can be handled much easily if you approach an NBFC, say Finway, for example. Besides using a more efficient disbursement process, these NBFCs also offer loan on cheaper interest rates compared to banks. Given below are some of the benefits for availing loans against property.

The process of approval is simple
Taking a loan against property in Delhi or anywhere else is quite simple. Because these loans are secured, they do not undergo as tight a scrutiny as personal loans. Because of the presence of collateral, the risk factor is considerably lower for the lending institutions and hence, the approval process is fast. In an ever-evolving, fast changing world, getting the loan at the right time can make the difference between success and failure, which makes loan against property really useful.

Lower interest rates
Again, for the same reason of being secure, loan against property has much lower interest rates, which means the borrower would have to return a considerably smaller sum compared to if he had taken an unsecured loan.

Repayment tenure is quite flexible
The repayment tenure can be 10 to 15 years or even more, in case the loan amount is high. This way the borrower can comfortably pay back the loan without feeling excessive pressure. Borrower’s credit score, account history, and market value of the property being pledged, determines the value of EMI or the overdraft.

Continuous ownership
One of the best things about LAP is that the borrower still maintains the ownership of the property. This comes in handy in case, for some reason, the borrower is not able to pay back the loan. Under such a scenario, he can sell the property and settle the loan.

Pre- closure clause
There is an option to pay a certain loan amount in advance, except if the loan is taken on fixed interest. Pre-closure allows the borrower to reduce the excess interest amount and the tenure of the loan by payment of a small additional sum of money.

Unlocking value of the property
If a person has a property and is in need of financial assistance, he can take the loan against the property. This way, he’ll be able to leverage the value of the property to satisfy his financial needs without having to sell the property – which is a great advantage.