What is a Loan Against Property? Know its 5 major benefits.
Loan Against Property: If you need funds, then Loan Against Property can prove to be a big weapon. In this, loans are available at low interest rates. It can also be used for business growth.
It is a dream to grow the business rapidly, but finance-related difficulties can sometimes become a hindrance in fulfilling this dream. Fortunately, banks and financial institutions provide various solutions, and one such popular option is to get a loan against property. A loan against property is a loan product in which you use your property as collateral. This means that you give your house, flat, or land as security for the loan. The person giving you the loan keeps the property with him as a guarantee until you repay the loan in full. But during the loan period, you can live in or use the said property.
LAP is a good option for business growth
Jagdeep Mallareddy, Chief Business Officer, of Piramal Finance, says, "Taking a loan against property can be a great option to grow your business, as it has low interest rates and high loan amounts. However, it is important to evaluate all your options and choose the option that best suits your financial situation and business goals."
Interest rates are usually low.
There are several benefits of using a loan against property for your business. First, interest rates are usually low, starting at around 8 percent per annum, making it easier to repay the loan. Unlike selling your property, which means you lose ownership forever, a loan against property lets you retain your property while getting the funds you need based on its value, your credit history, and your income.
Loan up to 65%
Non-banking finance companies (NBFCs) can lend up to 65 percent of your property value, sometimes up to Rs 5 crore, giving you a lot of options. Also, monthly payments are easy. The amount is usually between Rs 750 and Rs 900 per lakh borrowed, and some lenders offer more repayment options to suit your business needs.
Use a calculator before taking a LAP.
Taking a loan against property is a popular option for growing your business, as it offers various benefits such as tax exemption on interest paid and related charges under Section 37(1) of the Income Tax Act. However, before making any decision, find out the best option for your business, and compare all the available options. It is also important to use tools like a loan against a property calculator.
Who is a loan against property good for?
To conclude, a loan against property can be a great option for those who want to grow their business while retaining their assets. It is important to consider all the factors and choose the best option for your financial situation and business goals.
