Demystify the myths around loan against property
Unlike personal loans against property(LAP) is a secured loan. Such types of loans can be given against property like homes. In this loan, your property is taken by the banks as collateral until you pay the amount of money that you are taking as a loan. The money from LAP can be used for any purpose like a wedding, or to start your business, or for any emergency medical purposes.
In the earlier days, there is a restriction that at least 20℅ of the amount should be paid a down payment, but these days banks removed that restriction to reach the needs of all types of people who are willing to get the loan against property.
In the context of a loan against property, some myths are necessary to discuss.
1st Myth: The amount that you’re willing to take as a loan is equal to the value of your property. These valuations are taken care of by the higher authorities of the bank. One can receive the 60℅value of their property.
2nd Myth: Applicants can get the loan against the residential property, so that your house should not contain any pending loans or any litigation. One can avail of this type of loan only if your residence is completely constructed.
3rd Myth: if you are very sure that you will repay the loan amount according to the fixed plan, then taking a loan against the problem will not create any problem, but if you are not sure, then taking a loan with h higher interest rate is far better than taking a loan against property.
4th Myth: people will generally say that the property you kept as collateral will not be used until you repay. But the statement is completely false. You have all the right to use the property that you have gained funds against. If you are in default, then the lender can sell the property to raise funds. Until then, your property can be used by you.
5th Myth: though your small income will not stop you from availing of the loan, it only indicates your ability to pay the loan. You don’t need to be in the higher income category to get this loan, but how you organize your income to repay plays an important role in getting the loan.
6th Myth: The rate of interest is based on your credit score and the situation or value of your property. As these loans are generally secured loans, the interest rates are also reasonable so maintain a good credit score will help you in getting less interest rate as well as take care of the property you keep as collateral should be high value.
7th Myth: many people will think that we can close the loan if we take it for a small period of tenure. But it also gives trouble to pay. For a shorter period, a high amount of EMI’s is a tough task, leading to a decrease in the liquidity in their accounts. So instead of taking a shorter period and facing such problems, take the larger period tenure with limited EMI’s, which has an opportunity for prepayment.
By following the above-mentioned myths, one can get a loan in the best way. The above myths that are mentioned are very common that everyone is using in recent days.