The Different Types of Loan Against Property Available and the Benefits Associated with Them

When we are in urgent need of money, one of the first things that come to our minds is a loan. But for most of us, the challenging bit is to decide which loan we must ideally avail of. While there are some concerns, financial experts unanimously agree that a mortgage loan, also known as a loan against property or LAP, is a secured loan and involves minimum risk for the borrower. It bears a comparatively lower interest rate and because a property is pledged, the loan is also sanctioned faster than other loan types. In case you already have taken a mortgage and want to mortgage refinance in Canada, that option is also available.

Types of Loan Against Property Available in India

The following are the common types of loan against property available in our country.

Loan Against Property for Education

A loan against property can be used for higher education in India or abroad. Some major advantages include hassle-free documentation, minimal eligibility requirements, quick disbursal, and flexible loan repayment tenors.

Loan Against a Residential or Commercial Property

A borrower can avail of a property loan on a residential or commercial property. In such a case, the borrower has to pledge their property as collateral to avail of the loan amount they are eligible for. The sanction is, however, based on the market value of the property.

Loan Against Property for Wedding 

Being a once-in-a-lifetime event, most do not rethink before splurging for their wedding or the wedding of a close one. A typical Indian wedding can cost some lakhs. Even though financial prudence calls for savings to fund a big wedding, the trend of gathering funds by availing of a loan has been on the rise. A property loan is always one of the best options considering the property loan interest rate. Borrowers can easily check their eligibility online by using a mortgage loan calculator.

Loan Against Property for Debt Consolidation

Consolidating several loans always helps. A loan against property is one of the best tools you can use to consolidate debts. This loan permits borrowers to consolidate existing debts and avoid penalties owing to pending dues. The benefit –  the person can save up on EMIs.

Loan Against Property for Renovation

Formfitting modern lighting fixtures trending in the market or fancy cabinets in your kids’ room, existing homeowners can make the best use of a mortgage loan to renovate homes

Loan Against Property by Profession

· Loan Against Property for Doctors

Doctors can avail of a loan against property to finance their funding needs. They can use the sanctioned amount to build a nursing home, expand an existing clinic, or refinance a home loan in the country. The benefits are similar to all other LAP borrowers: quick disbursal, high loan sanction, flexible repayment policy, and customized insurance schemes.

· Loan Against Property for Chartered Accountants

Chartered accountants can avail of a property loan to satisfy their business and/or personal requirements, including a wedding, expanding business, paying for medical emergencies, and so on. The eligibility for chartered accountants is based on their repayment capability.

Mortgage Loan Benefits

If an aspiring LAP borrower has a decent credit history and is prompt with EMIs, there are no better options than LAP. Here’s why.

Permits Sanctions to Be Enjoyed by Everyone

A loan against property can be availed of by salaried and self-employed individuals. In the case of a LAP loan, the value of the property being pledged along with the borrower’s income influences the eligibility for a LAP loan. Besides, credit profile, remaining years of service, and age also impacts the mortgage amount and other criteria. 

Helps Secure a Sizeable Loan Sanction

Based on policies and eligibility, borrowers are eligible to secure a LAP loan of up to 75% of the current property. Besides, borrowers may also take advantage of long tenors (up to 14 years for salaried individuals and 18 years for self-employed) permitted in a LAP.

Ensures Lower Mortgage Loan Interest Rates

A mortgage loan usually comes with a lower interest rate than other types of borrowing. Opting for fixed monthly repayments indicates that a borrower can use them in planning, enabling them to work on their financial goals with certainty.

Dictates No Restrictions on Loan End Use

A loan against property helps manage big-ticket expenditures easily and timely. A borrower can use the fund from a loan against property for weddings, debt consolidation, studying, and even property purchases. All credits to the sizable sanction such a loan entails can cover these expenses without adding on to the borrower’s trouble.

Involves Minimal Documentation and Efficient Disbursal 

When compared to all other loans, a LAP loan always involves a relatively hassle-free documentation process. Besides filling the mortgage loan application form with accurate information and providing valid supporting documents. A loan applicant also needs to submit property-specific documents as the lender prompts.

The Final Word

If you are wondering how to apply for mortgage loan, you need to visit your preferred lender’s website and fill up the application form. Keep basic personal details handy. Apply and a lender representative will get in touch with you soon after you submit the application to guide you through the next steps.