Loan against property, you can overcome any cash problems, especially that which requires a considerable amount. Whether you are paying for your youngster’s wedding or starting a new business venture, a loan against property can fund it all. Look at all you need to consider when you are taking a loan against property.
Element to consider before taking a LAP:-
Criteria:
The criteria of your Loan Against Property depends on the following factors i.e. age, income, existing financial responsibilities, repayment and credit history, and the property value as per the current market price. You need to submit documents to check your criteria.
Annual Percentage Rate:
Being a secured form of loan-backed mortgage, a loan against a property usually involves lower interest rates, starting at as low as 9.65% per annum. On the other hand, other borrowing options such as personal loans or gold loans involve higher interest rates, ranging from 10.99%-24% and 9.24%-26% respectively.
Period of Time:
Loan against property borrowers may find themselves comfortable with the longer tenure offered, but in the long term, they end up paying more interest which makes the loan expensive. Before shortlisting the bank/lender understands how much the loan is going to cost value.
Processing Fee and Prepayment Amount:
Just like other loans, a loan against property also involves processing charges cost, which is usually up to 2% of the full loan amount. In addition to this, bankers may levy prepayment penalty for loans lent at fixed interest rates or to non-individuals at floating rates.
