In case you are looking to take up a loan and have been considering doing it against a property you own, it is important that you gather information about what Loan Against Property essentially entails and the types that there are of the same. Doing so beforehand will ensure that you take up a loan that is most suited to your financial need as well as ensures utmost security of the property you are taking the loan against. Let us acquaint you with the different aspects of Loan Against Property.

How they are different?

It must first be understood that Loan Against Property is essentially a secured loan which enables you to attend to your business as well as personal needs relating to finances, after you have mortgaged your property. Any person in need of money can avail this loan whether they are salaried or self-employed as it has nothing to do with your monthly income. However, if you are someone who is salaried you must have a minimum work experience of three years or more and in case of self-employed applicants you must have a business presence of about five years. Moreover, ITR of three years is mandatory.

Other eligibility for such loans

There are additional eligibility criteria for Loan Against Property and they are that each applicant has to be within the age of twenty-one to sixty five years. These loans are given for a period of fifteen years that is dependent on the age of the one applying for it. The lending house will put in place a system where loan will be given up to 60-70% of the current market value of your property.

Regular loans of this type

Of the various types of Loan Against Property now common in the market, the most known one is the regular LAP which is taken for purposes of business expansion and development of business, to be able to acquire newer assets using your existing ones and also when medical emergencies come without a warning and you are not ready to meet the expenditure of elaborate treatment. It is necessary to go into some research to understand if this is suitable for your financial needs.

The other types of LAPs

There are two other types of Loan Against Property which are loan against property overdraft and loan against property top up. The former is suitable for those finance owners who are staring at a possibility of surplus or fluctuating income within the course of the year. This loan type allows borrowers to be charged interest on the principal outstanding amount alone while also being able to deposit the surplus money in the loan account at any time. The latter type of LAP is an additional amount of loan money that you can apply for on an existing Loan Against Property, combining both of which you should have less or equal to 70% of the market value of the property.

It is necessary that you learn about the different eligibility criterion that apply for the different types of LAP and make an informed financial decision.