The present credit market provides a loan seeker with several credit products.
Loan against property gives you access to direct funds by keeping your property as collateral. A long repayment term and low interest rate makes LAP a popular choice.
Loan Against Property:
Today, in the real estate market, any property is an asset. One can utilize their property as a home or earn rent. The same property can also help you acquire capital with the help of loan against property. It is a secured loan that you can avail by keeping commercial or residential property as collateral.
Why Loan against Property?
The chance of getting approval on loan is higher in the case of Loan against Property. This is because banks and NBFCs have collateral as security in case the borrower fails to pay back the loan.
Purchasing a new property or renovating an existing one may need financing. For that, loan against property can be a good option. Other than these, requirements that lead to loans against property are loan consolidation, business funding or working capital requirements. A loan against property is a multiuse, quick processing and much cheaper credit product.
Advantages of loan against property:
Simple Approval Process
Among many other benefits of a loan against property, the ease of approval is one of the notable advantages. Availing a loan against property is much easier than availing an unsecured personal loan. The only precondition is that the property title is free from any kind of mortgage litigations.
A loan amount availed through a loan against property is free from any restriction on usage. The borrower can use the loan amount for any industrial purpose. May it be business expansion, working capital or acquiring business assets, loan against property is a fit for all monetary needs.
A loan against property is a much cost-effective way of availing the needed financial support. A loan against property interest rates is much cheaper than unsecured multipurpose loans. The interest rate of a LAP generally ranges from 12% to 15%, whereas the interest rate of a personal loan ranges from approximately 12% to 25%.
Flexible Loan Tenure
The tenure of a loan against property is a quite long one. It can be stretched for more than 3 years whereas the longest tenure of other loans is lesser. A longer tenure creates less financial pressure on the borrower.
Minimum Debt Burden
The debt load of a loan against property is much lighter as compared to others. The two factors which make a loan against property a lighter debt are – low-interest rate and longer tenure.
In case of a loan against property, unlike other secured loans like a gold loan, the ownership of the property remains with the borrower. The borrower can continue to use the property. No changes/ ownership authority of the lender is liable. The only thing which bank/NBFC will keep is the custody of the mother deed and the sale deed of the property until the loan is paid off.
Best Possible Use of Property
A loan against property provides you the maximum value of your property. It opens up the real potential of the property. Along with the general use of a property, it helps you avail a loan at a lower interest rate. The borrower can maintain the ownership of the property while availing a loan against the same property.
Electronica Finance Ltd.’s loan against property is an ideal product to raise money when you own a property which can be mortgaged. This product helps you use your free property to take a loan which can be used for business expansion, working capital or acquiring business assets.
If your CIBIL score is more than 600 and vintage 3+ years, you might be eligible for EFL loan against property. These parameters are not mandatory, but they will improve your chances of getting a loan. EFL offers minimum loan amount of 3 Cr with flexible repayment options. Industrial or commercial property can be used as collateral. You can avail EFL loan against property at your doorstep and fund all your business needs!