A Loan against home is one of the most convenient type of loan available in the market. Although there are various avenues of availing cash, a loan against home or lap is probably the best option there is, especially when you want large funds for:
- expanding your business
- Higher education
- Wedding expenses
- purchasing large equipments and machinery
- buying a property (commercial / residential)
- closing off other high cost loans
There are so many different reasons you might want to use your money for, point here is to have an easy access to it, as and when you need it. Although the convenience aspect cannot be questioned, there is the concern that the interest rates for borrowing against your property are higher when compared to other types of secured loans such as housing loans. However, there are several advantages that are unique to availing a loan against home which make them a popular choice despite their higher rates. Let us take a look at some of the main advantages of a LAP:
1. Loan of up to 70% of the value of your property. The maximum loan amount that can be availed is up to 5 crores (as provided by most banks).
2. There is the option of Overdraft wherein you can borrow a large amount depending on your requirement despite having insufficient balance in your account. You can avail this after providing your property as collateral. Your overdraft limit will be determined by the value of your property as well as your account history.
3. The total processing time is much less when compared to the processing time of home loan applications.
4. If the value of the property has risen during the tenure of the loan, the owners also have the option to avail a top-up on their existing loan. This is especially useful for business men.
5. There are convenient repayment options such as part payment or foreclosure and more than sufficient repayment tenure of 5 to 15 years.
6. You can easily borrow against a residential or a commercial property.
If you are looking for large funds in a short span of time, then you can definitely consider availing a loan against your property. Of course being eligible is a whole other story.