Borrowers resort to secured credit options like a loan against property for substantial credit requirements. However, as per the requirements and purpose of usage, selected financiers categorised this advance into different sub-categories. Hence, individuals can find several types of loans against property in India while they accompany almost the same features.
Therefore, before understanding how to apply for loan against property, one should know about the types of LAP prevalent in India right now.
Types of loans against property in India
While applying for a LAP, a borrower mortgages a property or assets and receives funds against that. The loan amount generally ranges up to 70% of the property’s current market value.
However, being familiar with the types of this financial instrument is necessary for the better utilisation of this fund.
- Loan against commercial or residential property: This loan type allows a borrower to obtain funds against his/her self-owned commercial or residential property. Here, the loan value depends on the current property valuation and LTV.
- Loan against property for wedding: One can fund wedding expenses by opting for this type of loan. Salaried, as well as self-employed, can opt for this credit.
- Loan against property for salaried personnel: Upon meeting eligibility requirements, salaried employees can secure a loan against property to finance various big-ticket expenses.
- Loan against property for self-employed individuals: Business owners and self-employed individuals can opt for this LAP to meet their business expenses and daily operational costs.
- LAP for home renovation: Face lifting a home, remodelling the bathroom floors, or installing kitchen cabinets requires a huge amount that might be difficult to arrange immediately. Securing a LAP for home renovation makes it easier.
- Lease rental discounting: Borrowers can pledge a let-out property that yields rental income. It allows them to avail funds against monthly rentals.
- Loan against property for education: Financing a child’s education becomes convenient if a borrower applies for a LAP. The funds cover tuition fees and other expenses that may or may not be related to education.
- LAP for debt consolidation: Multiple debts can increase the financial burden for borrowers. Consolidating those debts by utilising this high-quantum fund from a LAP will enable an individual to get rid of debts faster.
- Loan against property for chartered accountants: Chartered accountants can secure a LAP for several purposes, including purchasing or leasing new premises, office renovation, hiring employees for a firm, etc.
- LAP for doctors: Doctors can invest in the latest medical equipment, incorporate new medical technology, renovate chambers or expand business by availing this loan against property.
Thus, knowing about the loan against property types in detail, a borrower can select any of these to meet fund requirements.
Key features of a loan against property
Here are some common features of a loan against property:
- Quick processing
A loan against property takes minimal time for processing. Borrowers need to fulfil the eligibility criteria and present few necessary documents for a seamless application procedure.
- Instant disbursal
Upon meeting eligibility requirements, lenders disburse a LAP in a very short time.
- Easy eligibility
Individuals need to meet few basic eligibility factors to opt for a loan against property.
- Flexible loan tenor
A loan against property has a flexible loan tenor of up to 20 years that allows borrowers to repay at their own pace.
- Online services
Borrowers can apply for a LAP online too. They can also use a loan against property EMI calculator to estimate their monthly instalments.
Furthermore, individuals can avail a high-value loan, ensuring lower interest on a loan against property. In addition to this, they provide pre-approved offers for a hassle-free loan application process. Such offers are available on a host of financial products like home loans, loan against property, etc. Borrowers can check their pre-approved offers by submitting their names and contact details.
However, fulfilling eligibility requirements and submitting necessary documents is necessary for all borrowers irrespective of the lender they choose. Thus, knowing about the types of loans against property is a bonus as it simplifies the loan securing process.
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