It is natural for you to get a bit worried about your finances when you want to send your son or daughter abroad for education, or even when you are seeking to finance your business” expansion.
One of the various ways you can arrange finance is by taking a loan. You can either take a personal loan or take a loan against property.
Loan Against Property (LAP)
A loan against property is funds disbursed against the mortgage of property. Typically, the amount of loan given is a certain percentage of the market value usually in the range 40% to 60%.
Loans against property are generally available for:
“Financing studies abroad
“Funding medical treatment
“Funding a vacation
A loan against property in NCR is given against any type of property that can include residential, commercial or industrial.
Some of the requisites to apply for LAP are:
“the individual must have property in his/her name
“LAP can be applied to property that is collateral
“there should not be any other encumbrances
While loans against property are obtainable from leading banks, certain finance distribution companies also make LAP available. In addition, some well-known finance distribution organizations offer loans with cutting edge approval processes enabling speedy approval and quick disbursal of loan amounts.
Some of these companies provide customized financial services including corporate debt syndication for large loans.
It is surprising that many individuals are reluctant to leverage their property for taking loans.
“When finances are strained, many prefer to borrow from family or friends”, says a financial expert.
“But prudent borrowers have experienced that taking a loan against property is the best option because it is cheaper than a personal loan and importantly being a collateral loan you can get a higher amount than the one you get for an unsecured loan”.
Here are some important pointers.
“If the loan is against property that has multiple owners, then all of them will have to be joint applicants to avail the loan.
“The property should be clear, without any encumbrances.
” The lender, such as a bank, will make a thorough check of all the documents related to the title of the property, and also ask for proof of identity such as passport or PAN card.
“If you are an employee, the bank may ask for bank statements for the past six months, and if you are self-employed you may be asked for certified financial statements for the past two years.
While taking a loan against property in NCR, borrowers must exercise due diligence, because in all matters related to loans, certain risks are involved.
Firstly there is no scope of any mistake; everything should be right the very first time itself. Secondly you cannot default on loan payment. This can result in loss of ownership of property in a worst case scenario.
But with good homework, and financial discipline, a loan against property is a boon in need.