A secured loan called a loan against property (LAP) enables you to borrow money by using your residential or business property as collateral. You in exchange for a piece of property that you possess as collateral.
Compared to unsecured loans, LAP enables you to borrow a larger sum of money at a lower interest rate because the lender has the security of your property to reclaim their money in the event of non-repayment.
Borrowers can also avail tax benefits on the interest paid on LAP, as per the Income Tax Act, 1961.
You can avail a high loan amount through Loan against Property as compared to other types of loans. The loan amount can be up to 50-70% of the property’s market value.
LAP has a longer repayment tenure, usually ranging from 5 to 20 years. This makes it easier for borrowers to manage their finances and repay the loan over a longer period.
The interest rates on LAP are usually lower as compared to unsecured loans as the lender has the security of the property as collateral.
LAP processing is relatively faster as compared to other secured loans such as home loans as the lender has the security of the property as collateral.
The eligibility criteria for LAP are relatively easy, and the documentation process is also simple.
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