When you are in urgent need of a considerable amount of money, An LAP loan will have your back. You can use it for your child’s higher education, marriage, or any other purpose.
What is an LAP Loan?
A Loan Against Property ( LAP loan) is a secured loan that you take by mortgaging your property. You can keep your house or residential plot as collateral. That will assure the lender about the repayment of the loan. Since it is a secured loan, LAP loan interest rates are also lower.
4 Tips To Choose the Best LAP Loan
You will get bombarded by several options while choosing your loan against property. How will you get the one that is suitable for you. Here are some tips to help you take the right loan.
Check the Eligibility Criteria
Not all lenders will have the same eligibility criteria. So, make sure you check them before applying.
Meeting all the criteria will reduce the chances of your application getting rejected. Moreover, your lender will also process the loan faster.
Most lenders will require you to be a citizen of India. Apart from that, you should be 25 years of age and have a stable source of income.
Know the Value of Your Property
The value of your property will affect the loan amount. So, knowing it will help you get the best amount.
Your property’s value will depend on several factors like its location, facilities offered, etc. The higher its market value, the faster your loan will get processed. That is because it will act as a security for the lender.
Compare LAP Loan Interest Rate of Different Lenders
The rates of interest would not be the same for all lenders. Compare the rates offered by different lenders. It will help you choose a loan with a lower interest rate. Though there only be slight variations, it can make a difference in the EMI amount and your total interest outgo.
You should also check the additional charges by your lender. It includes the processing fees, etc. Sometimes, the interest rate might be low. But these additional charges might add up to your expenses.
Do Not Borrow More Than You Require
It is crucial to borrow the right amount. If you borrow more than you require, it will increase your interest payments unnecessarily.
You can list down the expenses that you plan to do with the loan amount. That will give you an idea of the amount you need to borrow. Apart from that, you must also consider your repayment capability. Make sure you can pay the EMI comfortably;y after meeting all your monthly expenses.
If you need a loan to buy land, consider the price of the plot. Decide if you can afford it before applying for the loan.
An LAP loan is quite popular because of its low interest rate. However, you must remember that the lender can seize your property in case of payment defaults.