Know the Benefits and Eligibility Criteria for Loan Against Property
A loan against property proves to be a beneficial borrowing solution in terms of addressing any substantial expenses. The affordable loan against property interest rate is another reason why most individuals prefer this financial product over unsecured credits.
Consequently, India’s loan against property market is estimated to witness a CAGR of more than 14% in volume to touch over $857 billion by FY26. While these statistics hint at a favourable time to opt for this credit product, individuals need to know its benefits, interest rates, and eligibility to make an informed decision.
Benefits of LAP loan
Following are some of the top benefits of availing a mortgage loan, like a loan against property.
- High sum
Since a loan against property is a secured credit option, individuals can avail a substantial loan amount by pledging any of their high-stake assets. Top financial institutions offer funds up to Rs.1 crore to salaried individuals and Rs.3.5 crore to self-employed borrowers, based on their eligibility and the current valuation of the collateral.
- Competitive interest rates
Besides large corpus, mortgage loan interest rates are another reason for the popularity of this loan option. Since a loan against property is backed by a mortgage, lenders can be assured of the timely repayment of the debt. Therefore, they offer a competitive interest rate while sanctioning this advance.
Convenient repayment options
Due to economical LAP interest rates, it gets easier for borrowers to repay this loan without any hassle. They can choose a tenor of up to 20 years and plan a seamless repayment structure.
To make this process even more convenient, they can also take the aid of an online LAP EMI calculator to estimate the monthly instalments. All they have to do is enter the loan amount, tenor and interest rates. The results will appear on the screen at once.
Although the loan against property interest rate is on the lower side, you can further save on repayment by claiming tax exemptions. For instance, under Section 37(1), you can enjoy tax deductions if you utilise the funds for business purposes. The deduction is available only on the processing fees and interest paid.
Similarly, under Section 24(B), tax benefits are applicable if you use the advance to purchase a residential property. In this case, also, the deduction can be claimed against interest paid, and the cap is Rs.2 lakh.
However, in any case, first, you need to have a clear idea of how you can avail tax benefits on your LAP.
Besides, a loan against property accompanies several other perks like an easy balance transfer facility, zero end-use restrictions, etc. Nevertheless, to leverage these benefits, you need to know the eligibility parameters in details.
Eligibility criteria for a loan against property
The loan against property interest rate also depends on the eligibility. With proper eligibility, borrowers can negotiate better rates and service terms. Qualify for a loan against property by meeting these simple eligibility criteria.
- Age should range from 33 to 58 years.
- Must be a residing Indian citizen.
- Employed at a reputed MNC or public or private firm.
- Aged between 25 and 70 years.
- Resident of India
- A steady monthly income as per the city of residence.
Selected NBFCs offer a loan against minimal eligibility and affordable interest rates. You can also use a mortgage loan calculator on the lender’s website to check the repayment options easily.
They also extend pre-approved offers that simplify and expedite loan processing. Such offers are available on various financial products like loan against property, home loans, etc. Enter your name and contact number to check your pre-approved offer online.
loan against property
Hence, loan against property interest rate and eligibility are two major aspects of borrowing that determine the affordability and loan amount. Keep these pointers in mind before applying.
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