We all want to dream big and work hard to achieve every bit of it. But, many times, our aspirations and dreams hit a roadblock due to a lack of funds. Fortunately, nowadays there’s plenty of financial solutions available in the market to get you out of your money misery and help you fulfil your desires. One such solution is a loan against property.
A loan against property is a secured loan that you can avail of against a residential or commercial property that the lender will keep as collateral with them. There are no restrictions on using the funds received from a property loan, so you can use the money availed of for various purposes. A loan against property is a convenient option for borrowers looking to finance high-end expenditures, which can be overwhelming otherwise.
Read on to know how such a loan can help you set your dreams free.
What Can I Achieve with a Loan Against Property?
A loan against property can help you financially in many aspects. Here is a quick look at some of them.
Consolidate Debt
A property loan for debt consolidation can be used to pay off larger debts. It combines your existing borrowings and leaves you with a single EMI (Equated Monthly Instalment) to be paid every month. Besides, it offers you substantial financing for a prolonged period. It is particularly beneficial as you get to convert your high-interest loans to one that comes at relatively low-interest rates.
Cover the Cost of Higher Education
If you’ve been dreaming of pursuing higher education abroad or want your child to get into an elite educational institute, then you must be aware of the huge expenditure involved in travelling, finding a new place, and so on. Under such circumstances, a loan against property proves beneficial in financing all the expenditures related to higher education.
Business Setup or Expansion
If you’re planning to set up your new business venture or expand an existing one, then you will need considerable funds to keep things moving ahead. A LAP loan will come in handy in such instances, as you can avail yourself of a hefty amount to aid your business plan.
Tackle Medical Emergencies
With healthcare expenses soaring by the day, a medical emergency demanding a lump sum can knock you off the edge. Given its quick disbursal duration, a loan against property may serve you right when facing unforeseen medical emergencies. You need not spend your hard-earned savings to meet those hefty medical bills.
Travel Abroad
Ever dreamt of travelling the world? By opting for a LAP loan, you can now live your dream without having to worry about splurging your retirement fund. It is an end-to-end financial solution to your exotic holiday expenditures.
Marriage Expenditures
Weddings in India are a gala affair and involve massive expenses. From booking a pre-wedding shoot to choosing a lavish venue and catering, or even booking an exotic honeymoon package, a loan against property is a great way to manage your wedding expenditures.
Advantages of Taking a Loan Against Property
A loan against property comes with the following benefits:
Low Rate of Interest
Due to being secured in nature, loan against property interest rates is comparatively low as compared to unsecured loans.
Zero to Nominal Prepayment Charges
As per RBI guidelines, borrowers with floating LAP interest rates need not pay an extra charge on foreclosure or prepayment.
Low EMI with Flexible Repayment
With a property loan, you can opt for a longer tenor, up to 18 years, to pay off the amount. This makes the distribution of the loan amount easier and offers you a low monthly EMI. You can use a LAP EMI calculator to get an estimate of the same.
Concluding Thoughts
Now that you know how a loan against property can help you achieve your dreams, look out for the best interest rates in the market. Several lenders provide attractive terms on property loan offerings. Currently, LAP interest rates on such loans start as low as 8.25%. Keep in mind that while applying for a loan against property, you will need to furnish a set of documents, including your address proof, ID proof, property and income documents, along with a duly-filled application form validating your eligibility to the lender. So, keep all these documents ready.
Additional Read: Know How to Compare and Reduce Interest Rates in India