COMPARATIVE STUDY BFSI

Loans against Property

An easy option, is it?

Loan against property (LAP) is a convenient way of raising cash. If you are in need of funds and own a property, you can use it as collateral to take a loan from a bank. The latter will exercise due diligence as far as the property is concerned, appraise its value, and offer you up to 70 per cent of its value as loan. Since this is a secured loan (due to the collateral), you can get a higher amount compared to an unsecured loan like a personal loan. How does it work, though? Is it the best option for you? What factors should you consider to weigh one type of loan against another – the rate of interest, the tenure, the time taken for processing, or something else entirely? Last but not the least, are you eligible at all to get the loan? This article is an attempt to take you through such questions and more.

Subas Tiwari & Gopal Ravi Kumar

Whether you are starting a new business or expanding an existing one, are looking for long-term working capital, need funding for a child’s higher education, have to repay your high-interest debts, or are faced with a medical emergency, you may not have to look far and beyond if you own property to mortgage against a loan. Loan is usually given only against residential property, but some lenders provide it against