LOAN AGAINST PROPERTY – “Enhance your earnings by leveraging your increased property value” !

Posted on Wednesday, March 2nd, 2022 | By IndusInd Bank

Most of us are meticulous business planners. However, there are times when you want to scale up business without having to disturb your savings.

At this point in time, borrowing money from friends and family could be an easier option. However if amounts are large, it may not be a good idea to stress their finances. A better option would be to leverage an asset you own—your house or commercial or your own rented or vacant properties.

This is what we term as a ‘Loan Against Property’ LAP, given that there are various credit instruments available in the market, how can LAP be the preferred option? Let’s take a real-life situation, and understand how can LAP be the best one.  

Ayush, a salaried individual, has exhausted his savings, but is yet to clear a massive hospital bill towards the treatment of his ailing father. His brother Anuj, a self-employed individual wants to make a large investment to fulfil his business expansion plans. Both brothers also need money to fund higher education of their children.

Both Ayush and Anuj need a hefty amount within in a short period of time. Their common friend, Indu, has advised them to put their assets to good use. Ayush owns a house where he resides, and Anuj has a commercial space from where he conducted his business. They could easily mortgage both properties, and cover their expenses by opting for a LAP.

But won’t they have to forego their property?

No! availing a LAP does not mean you cannot use the said premises until you pay off the debt. You can continue living in the house or working from the commercial space, even after availing of a loan against it. The lenders will not take possession of your asset when you take a LAP, unlike Gold loans wherein  you have to hand over the Gold to the lender in exchange for the money. Only the original property papers remain with the lender to ensure no further sale takes place until the loan is repaid.

Why should Ayush and Anuj opt for a LAP? They could opt for other loans as well

There are many instruments available in the market, like business loans, Gold loans, or even personal loans. Amongst all the other loans available, a LAP is a popular choice for the following reasons:

Quick and Simple Procedures

When you encounter a sudden financial emergency, a swift loan disbursement becomes the need of the hour. Getting approval for a LAP is a fairly simple and quick process. For instance, a borrower seeking a LAP from IndusInd Bank can get it sanctioned and disbursed within 4 working days.

Secure a large amount at once

The value of a property is usually higher than other regular assets. A LAP covers up to 70% of the market value of a residential property, and 60% of the market value in case of a commercial one.

Enjoy the benefit of lower interest rates

A competitive interest rate is a vital feature of a LAP. You can therefore, take advantage of  it, and repay the amount in a manner that suits your financial well-being.

Advantage of longer loan tenures and easier monthly repayments

LAP offers a longer repayment tenure that goes up to 15 years, which in turn reduces the burden of EMIs. Most other credit instruments that offer large payouts and low-interest rates, along with the option of using the money freely, come with very short repayment tenures.

Funds for multiple purposes – without restrictions

Usually, home loans can only be taken for the purchase of a residential property, and some business loans restrict the usage of the funds to business purposes only. But the funds borrowed under a LAP can be used for multiple purpose, without any restrictions. In this case, both Ayush and Anuj can now secure their children’s future as well as invest the remaining amount in their business.

Availability of top-up loan

Once you’ve mortgaged your property for a loan and suddenly have another huge expense coming your way, you can opt for additional financing on top of the existing LAP. It will save you the hassle of applying for a new loan.

Beyond individuals – This loan option is available to Companies/Firms as well

If a privately owned company, partnership firm, or even an unlisted public company owns a commercial property, the company can still take a LAP just as easily as an individual.

No hidden/additional charges

Loans usually come with a lot of charges such as pre-closure, processing, and many more. In case of a LAP, such charges are either eliminated or brought to a minimum. Using their most valuable assets –

So, if you own a property, opt for a LAP and unlock its hidden potential to clear your other dues on time. If you’re thinking of availing the benefits of a LAP, to expand your business or cover your personal expenses, visit https://www.indusind.com/in/en/personal/loans/loan-against-property.html and check out IndusInd Bank’s popular ‘Loan Against Property” features designed to give you the most optimum and financially sound solution to your financial needs.

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.