Loan Against Property is fast becoming a common method of raising funds. You should own a property in order to be eligible for this loan at the first instance.
A Loan against property is a loan taken against security of a property. You can avail this loan by keeping your property as a security in favour of the lender. It is also known as secured loan or LAP.
This loan is taken for numerous reasons. Some of the common among them being business expansion, big wedding, foreign trip, funding child’s higher education, medical treatment etc. The amount of loan will depend upon the market value of property. Usually, lending institutions offer 40% to 60% of the market value of property as a loan.
Please note that value of property is not the only criteria considered by lender while sanctioning a loan against property. Other factors like income of the borrower, liabilities, financial track record etc. are also taken into consideration. One must take avail the loan based on repaying capacity since if the borrower fails to make repayment of the loan, the lender can take possession and realize the property mortgaged for availing loan towards repayment of loan.
Loan against property can be availed on various types of properties, some common among them being-
>Self-owned residential property
>Self-owned rented property
>Self-owned Commercial property
>Self-owned piece of land