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Need emergency money? Opt for a bank when taking loan against property

Here is how the loan against property rates offered by banks and housing finance companies stack up

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Loan against property

Tinesh Bhasin 



banks
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  • Businesspersons commonly use (LAP) to meet their cash flow requirements. They use their assets to borrow large sums at lower rates
  • The salaried also use it to fund significant expenses, such as marriage, education abroad, or for debt consolidation
  • Lenders typically lend up to 50-60 per cent of property value.
  • Earlier, non-banking finance companies (NBFC) were aggressive in this segment but have slowed down after the liquidity crunch
  • Industry experts say taking LAP from banks is advisable
  • Since the amounts offered are high, some tend to over-leverage. Avoid doing so
  • The borrower can also get a top-up if he has a regular repayment track record
  • LAP does not offer any tax benefit. Business owners can, however, show the interest paid as an expense
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First Published: Fri, October 11 2019. 10:15 IST

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