Loan against Property is also known as a mortgage loan which can be taken to fund children’s education, meet wedding expense or it can also be taken as business loan to grow your business. It is a secured loan as here collateral is involved. For any legitimate purpose you can proceed with loan against property for the claim.
Loan Against Property is defined as the secured loan where a mortgage is required and so the collateral is put against the loan. This means that, if you need this loan you require to mortgage your property against this loan with the bank. In this kind of loan, you can mortgage any of the property either residential or commercial. Hence, if you require a higher loan amount you must mortgage a costlier property if you an option.
Its important to remember that the property which you are putting up for your loan should be free any encumbrance (i.e. it is not given as security for any purpose or any other loan).
Banks provide LAP for both Salaried as well as Self-Employed individuals. Banks will always want to consider all risks, which is why while you are applying for your loan against property, there are certain factors the bank considers with respect to your property to mitigate its risks in giving out the loan.
These factors determine your rate of interest, and loan amount. You can get a LAP of up to 80% of the registered value of your property depending on the Bank’s policy and the property type and valuation. The value of the property would be determined through a valuation conducted by the Loan Provider.