In recent times, there has been significant growth in the people taking a loan against their property. These are the people looking for immediate and adequate funds. Since a LAP is acquired by pledging one’s property as a collateral or security, it can be easily availed by those who own a property. It can be any property, from a residential property to a commercial one, individual houses, or even a land.
A loan against property is a secured type of loan, also known as mortgage loan, where your house or commercial property is put as collateral by submitting the property documents to the lender. However, you will not lose the ownership of the property. This is the reason why this financial product has become so popular amongst people, and the lending institutions are also willing to offer such loans since they know it is a secured loan.
Here are some reasons why the loan against property (LAP) market is growing massively.
#1 LAP gives access to immediate funds
The best part about taking a loan against property is that it can be used for any purpose, like funding a marriage, paying for higher education abroad, for business purposes like expansion or purchasing machinery, for taking care of hospital bills, and a lot more. The situation may arise where you may require instant access to surplus cash. It can be for any of the purposes mentioned earlier. The best thing about LAP is that it is processed and sanctioned at a faster rate as compared to any other loan available in India. This is because it is a secured loan. The paperwork and documentation are not that strenuous. So, more and more people are availing it.
#2 LAP is available for both self-employed and salaried employees
It doesn’t matter whether you are salaried or self-employed, as long as you own a property, you are eligible for a LAP. As salaried individuals, many people have certain dreams and aspirations like going on an extended vacation with the family, home renovation like adding a new floor to an already existing building, or for emergency needs like paying for hospital bills. So, the first thing a salaried individual will look at is getting a loan that is easily available and that too in surplus. For a self-employed person, they must be thinking of expanding their business. So, they can mortgage their residential or commercial property to get the funding. This is another reason why LAP is becoming more and more prevalent.
#3 LAP offers lump sum at low interest rates
Another reason why the LAP market is skyrocketing is that people are attracted to it because it offers adequate loan amounts. The loan amount you get will depend on the current value of your property. Since property rates have always remained in the higher corner, the loan amount you get by leveraging your property is high. On top of that, the loan against property lowest interest rate makes it possible for people to avail it.
These are the top reasons why the loan against the property market is growing massively.