loan against property vs personal loan

How Can LAP Help You Survive These Tough Times


How many of you would confidently agree to be tight-pocketed during the pandemic? The pandemic hasn’t been easy for any of us. Be it in the sector of business or lack of funds for small-scale, and every sector has incurred a loss in its own way. In such critical situations, the Loan Against Property (LAP) is your go-to. It can be the band-aid to your wound and cater to expenses of all types. Given below are a few pointers on how the LAP can be a boon.

1. Caters to multiple needs

A LAP can assist in funding if you are a business tycoon. Be it small-scale or large-scale. It helps in adhering to the guidelines of every mode. You can also include untimed and unwanted emergencies under the loop of a LAP. With the pandemic and disasters affecting several parts of India, LAPs also incorporate the provision of renovation and repair costs.

2. Reduction in EMIs

Long tenures within a LAP directs towards a lower EMI. With this, the rates become lenient and affordable. 

Note: A longer tenure can also increase the total cost paid as interest.

3. Pertain a larger amount

Depending upon the type and valuation rate, the amount can be higher. In this case, the financial institutions offer you the property value of 65%. 

4. Collateral ownership

Since you need to pledge the property as collateral, you will still continue to own it, while the pledge continues. During times of difficulty, this will act as a satisfactory medium of support. But, avoid defaults, as that can lead to loss of pledged property.

5. Asset need not be sold

Placing LAP requests and gaining approval does not mean that you will have to sell your assets for money. 

6. Online benefits

Since stepping out of the house during a pandemic is not appreciated, you can benefit from online documentation and get your needs fulfilled.

Now, the eligibility criteria for LAP are,

Age: 25-55 years 

Need to have job experience, irrespective of salaried or self-employed

Documentation: You need to present a set of property documents and income proof, apart from your ID. Passport-size photographs and income proof, if you are a Salaried Individual needs to be submitted. In such a case, present your salary slip and bank statement. If you are a businessman, provide IT returns and registration certificates.

Strike a comparison: Jot down and compare the LAPs provided by financial entities. Under the same, you need to perform research and come down to selecting a viable source. Go through the terms and conditions listed under the bank’s guidelines.

Repayment capacity: As far as the repayment is concerned, the lender will have a read through your documents. Make sure to have ‘emergency money’ stocked up until you receive the loan amount. List down a monthly budget and write down the requirements.

Listed below are banking entities providing LAP,

Banks Rates Fee
ICICI Bank  8.90% 2.00%
SBI 8.80% 1.00%
HDFC  8.90% 2.00%
Indiabulls 10.50% 1.00%
Citibank 7.45% NA
PNB Housing Finance 9.80% 1.00%
Bank of India 10.65% 1.00%
UCO Bank 9.20% 1.00%

Even though a LAP can be highly beneficial, read through the basic guidelines provided before taking the bigger step. Think wisely

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