Planning to avail of loan against property? Here are rates offered by banks

Here are the rates and terms offered by top banks and fousing finance companies for loans against property

Loan against property (LAP) is a popular product among business persons for borrowing  a large sum of money at a cheaper rate.

Many also use it to fund a large expense such as a wedding or a child’s education abroad. Lenders typically give 50-60 per cent of property value as loan.

A borrower’s property value alone is not the parameter that determines the quantum of the loan he can avail. Lenders look at credit score, age, income, repayment capacity, etc, to arrive at the loan amount.

If the property offered has more than one owner, the others will be considered as co-applicants. Lenders will give a loan based on the borrower’s share in the property.

As a borrower can raise a large sum of money using LAP, many tend to over-leverage themselves. Taking more than you can repay increases the risk of default and a borrower can lose his property.

The borrower can also get a top-up on the existing LAP if he has a regular repayment track record.

Most lenders don’t charge pre-payment or foreclosure fee for LAP

LAP does not offer any tax benefit. Business owners can, however, show interest paid as an expense