Loans against Prop­erty

Consumer Voice - - Contents -

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

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