The first thing that comes to your mind when facing a financial crisis is a property loan. Opting for the right loan can help you handle any situation and urgent issues. 

Making a choice and choosing the right loan is a challenge with numerous available options. Amongst all, you can choose one loan for any purpose and without any hassle in emergencies – a loan against property.

Read on to learn more.

What is a Loan against Property?

Loan against property (LAP) is the type of loan where the borrower offers their property as a security or collateral to the lender for the loan. With this, the individual can get the loan instantly in case of a financial crunch. 

Property refers to the land, house, building, or other owned area.

Unlike a Personal Loan, a LAP is a secured loan option. It has no end-use restriction, and the loan amount can be utilised for any purpose.

Why should You Opt for Loan Against Property?

Here are some key features of a Loan Against Property which make it the preferred financing option for anyone. 

• No transfer of ownership but the only property on hold.
• Low-interest rates for repayment.
• No end-use restriction to the loan amount utilisation purpose. 
• The high loan amount provided as per the need.
• Flexible loan repayment tenure, which can be extended.

Factors to Consider While Applying for A Loan Against Property

After thoroughly examining what a loan against property is and how it benefits you, you can also consider other factors.

Loan Amount

If you fulfil the eligibility criteria for a loan against property, you can opt for a good amount of loan. You can get up to 70% of the value of your property. Choose your lender carefully. 

Interest Rates

Every lender has different interest rates for different types of loans. Before choosing the lender, you must look at and compare the interest rates offered. 

PNB Housing is amongst the most trusted and reputed lenders offering attractive interest rates on loan against property.

Loan-to-Value Ratio

The ratio of the loan amount you want to borrow upon the actual current value of the property kept as collateral is the LTV ratio, and it is an important factor to consider. 

This value helps decide the maximum amount you can avail through a loan against property.

Tenure of Loan and EMIs

Tenure refers to the loan repayment duration, which can be up to 15 years. Choosing a suitable loan tenure according to your repayment capacity is very important.

If the tenure is short, the monthly EMI amount would be greater. At the same time, longer tenure means a higher amount of interest at the end. 

You can plan your loan with the help of an EMI calculator to find the middle ground between tenure and EMI.

Tax Benefits

According to the law, if you opt and meet the eligibility criteria for the loan against property, you can have tax deductions of up to 2 lakhs for house building. 

Final Words

Now that you know about the loan against property, you can take its advantage when in need of funding. 

PNB Housing can help you get the loan against property at the best interest rate and quick approval. For more information, go to the PNB Housing website.

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