Loan against property (LAP) are secured lending options as borrowers avail these loans by keeping their residential property as mortgage. These credits come with zero-end use restrictions, allowing borrowers to utilise the funds for any monetary requirements.
An LAP can also be used for home renovation, since renovating or refurbishing a home can incur significant expenses. Several financial institutions and NBFCs offer LAP for home renovation purposes.
What are the eligibility criteria for availing a loan against property (LAP)?
Applicants can qualify for a loan against property my meeting these simple eligibility criteria –
For salaried employees
- The applicant must be between 33 and 58 years of age.
- The applicant must be a salaried employee in an MNC, private, public company.
- The applicant must be an Indian resident.
For self-employed individuals
- The applicant must be between 25 to 70 years of age.
- The applicant must have a regular source of income.
- The applicant must be a resident of India living in cities where the lender operates.
How to apply for a loan against property?
To know how you can apply for a loan against property for home renovation, read below –
Step 1: Visit the official website of the lender and submit your online application.
Step 2: Once it is approve, a representative will contact you within 24 hours of approval.
Step 3: Once the verification process is done, your property loan will be approved in 48 hours.
Step 4: Once your loan is approved, you will have to submit your documents to the lender.
What are the features and benefits of loan against property?
Lending institutions and NBFCs provide several benefits on mortgage loans which enable borrowers to meet their high-end expenses with convenience.
- Instant loan approval
Once the loan is approved, the amount will be disbursed to the borrower’s account within 4 days.
- Property loan up to Rs. 3.5 Crore
Applicants, who are salaried individuals, can get a mortgage loan of up to Rs. 1 Crore. And self-employed individuals can get a property loan of up to Rs. 3.5 Crore.
- Flexible repayment tenor
Lending institutions and NBFCs offer an affordable rate of interest on property loans with an extended tenor. Henceforth, the loan repayment period for salaried employees can extend from 2 to 20 years, and self-employed individuals can choose a tenor of up to 18 years.
Moreover, some financial institutions also allow borrowers to withdraw funds as they require, and pay interest only on the amount utilised. It can help save a significant amount of money on payable interest.
- Easy balance transfer facility
Borrowers can transfer their existing property loans to a different lending institution or NBFC using the Loan Against Property Balance Transfer facility. Furthermore, applicants will get a high-value top-up loan on this facility.
- Low prepayment charges
Applicants who avail a loan against property at a floating rate of interest can enjoy part-prepayment and foreclosure facilities at negligible charges.
You can get these benefits from several reputed financial institutions, including NBFCs like Bajaj Finserv. They bring pre-approved offers that make the process of availing loans convenient while saving time. These offers are available on home loans, business loans and personal loans along with several other financial products. You can check your pre-approved offer by providing a few essential details like your name and mobile number.
What are tax benefits from Loan Against Property?
Financial institutions and NBFCs allow borrowers to claim tax benefits on the interest amount. To know how you can avail tax benefits on your loan against property, read below –
- When borrowers use the loan amount for business purposes, they can claim for tax exemptions. In such cases, tax benefits can be claimed against the interest paid and associated fees incurred.
- Under Section 24(B) of the Income Tax Act, salaried employees can claim tax benefits if the borrowed amount is utilised to purchase another residential property. The maximum deduction the borrower can claim for is Rs. 2 Lakh. Although Section 24(B) specifies that applicants can only enjoy such exemptions if he/she can successfully confirm a link between the borrowed amount and their end-use.
Now that you know how to apply for a LAP for home renovation complete the loan against the property process by submitting the online form. Also, be sure to check all the terms and conditions before zeroing down for a loan.