What purpose can one use loan against property funds for?
- To fund business and working capital needs of individuals, partnerships, private companies and SME's
- To purchase new property by pledging existing property
- As lower cost alternative to personal use and uses such as marriages, education, vacation, home renovation, medical emergency
What are the benefits of availing LAP instead of other loans?
- As loan against property is secured against property, banks offer lower rate of interest compared to unsecured business loans or personal loans
- Loan tenure can be upto 18 years leading to lower EMI compared to unsecured loans where loan tenure can only be upto 5 years
- No additional collateral or guarantee is required
- Loan can be taken in name of company/ firm even if the property is owned in individual name of partners/ directors
Is prepayment penalty or foreclosure charge payable on loan against property from banks/ NBFC/ Housing Finance Company (HFC)?You can now prepay property loans without any penalty or charges if:
- Your loan is at a floating rate of interest and not a fixed rate
- The loan is in the name of one or more individual borrowers and not corporate or business entities (such as a firm, partnership, AOP, company)