4 advantages of a loan against property.

A loan against property is the perfect financial tool to arrange funds for your urgent needs. Regardless of whether you need funds to cover a child’s further education or marriage costs or if you need money to start, expand or save a business or even if you need funds to cover a medical emergency, a loan against your property is all you need to bridge your financial gaps. This article will highlight 4 advantages of this attractive financial aid to ensure you make the right borrowing decision when in need of funds.

1. Lower interest rates.

Say you need money to cover your child’s education plans. In such a case you have three options; the first could be to opt for a student loan, the next could be a personal loan and the last is a loan against property. Student loans come with interest rates ranging from 10 to 16 percent per annum. Personal loans rates are even higher and can be anything from 16 to 22 percent per annum.

On the other hand, a loan against your property comes with interest starting as low as 9.50%. As far as the upper limit is concerned, the maximum you’d have to pay is around 11.60% per annum.

2. Tenures of a loan against property.

The tenures of repayment play an important role in deciding the EMI amount. Shorter tenures usually mean higher EMIs and more stressful repayment processes. On the other hand, longer tenures allow you to spread the repayment over more months meaning lower EMI amounts.

This is another area where a loan against your property comes out advantageous. Where personal or education loan comes with maximum tenures of up to 10 years, a loan against property comes with tenures of up to 15 years. These extra 60 months make repayments much easier.

You might say that longer tenures invite high-interest payments and you’re right! But you can always prepay and cut short the tenure of the loan. Therefore a longer tenure allows you to repay the loan at terms you are comfortable with.

3. Loan amounts.

Another area where a loan against property comes out trumps is the loan amount they provide. You can get as much as 60 or 70 percent of your property’s value as the loan amount. Considering the value of property in today’s day and age, you are bound to get a substantial loan amount with a LAP.

4. Easier to get.

Banks are more than willing to provide these loans as they require the borrower to pledge their property. Lenders know that the borrower will do their best from defaulting as they know their property is at stake.

So if you need funds urgently, keep a loan against property in mind. It’s a great option and it will help you fill any financial gaps with ease. We hope this article has been helpful; you can always consult a financial expert as well if you need to iron out any doubts.

Good luck and all the best.

Hi, I am Anurag Mishra working with Home Finance company as Home Loan adviser owing good knowledge of Home loan, Home Loans, Home Loan Balance Transfer, Mortgage Loan, Property Loan and Personal Loan so on.