Loan against property or LAP loan is one of the most popular secured credit options in India. Borrowers can use the high loan value to meet multiple financial requirements with ease. Regardless, to make the most of the loan option, individuals must become familiar with its essential features and benefits.
Here’s a list of top features and benefits of the advance.
High loan value
LAP Loan offers borrowers a high funding value against a nominal rate of interest as against unsecured loan options. Depending on the market value of the mortgageable property, individuals can avail a loan of up to Rs.3.5 crore.
Most financial institutions extend a flexible tenure for loan repayment. Typically, such a tenor may extend up to 20 years. However, depending on one’s repayment capacity, borrowers should pick a suitable tenor.
Simple application process
Several financial institutions allow individuals to apply for the LAP loan online. By simply navigating to the loan against property section on a lender’s website, one can easily fill up the application form. Typically, such applications are approved quickly, and loan value is disbursed to the applicants’ account within a few days.
Zero end-use restriction
There are no restrictions to the end-use of a loan against property. Borrowers can utilise the loan amount availed to meet several financial requirements, including – funding higher education, meeting urgent medical expenses, planning a wedding, renovating the home, etc.
Likewise, individuals who have used the loan amount to purchase a residential property can claim deductions on interest paid as per the existing loan against property interest rate up to Rs. 2 lakh under Section 24B.
Also, specific utilisation of the loan amount extends tax benefits to borrowers. They can claim exemptions on interest paid and related charges if the credit amount is used for business expenses.