What is MLAP?
Property, whether residential or commercial, is always considered as a potential investment that can be pledged to avail a loan against a property when the need arises.
MLAP or Micro Loan Against Property is commonly referred to as loan against property that falls under the category of secured loans. One can avail a loan against self-owned property by keeping a residential or commercial property as collateral with the lender.
Whether you’re looking for expansion to the property, meet the capital requirements of your business, financing your child’s higher education or their wedding; you can easily apply for a loan against property. The funds received can then be utilized for the said purpose.
Features/Benefits of Loan Against Property
Loan up to 60% of the value of the property
With loan against property, you can avail a high-value loan amount up to 1 crore INR or 60% of the value of the property. When you apply for a loan against a property, the price estimation of the same is done by the officials from the bank/NBFC.
Based on physical inspection and complete property documents in all respects, the loan amount is decided and sanctioned. Loan against property is one of the best and hassle-free borrowing options when you want a high-value loan and have a property to offer as collateral.
Longer loan tenor
Loan against property is for the longer run. Typically, one can avail a loan against property with a loan tenor of up to 15 years. However, the extended repayment tenor can certainly be affected by other factors in play too, like age and income of the borrower.
This is a significantly longer loan tenor when you compare it with personal loans.
Reduced interest rate
Since loan against property is categorized as a secured loan, the rate of interest is lower when compared to a personal loan. The reduced rate of interest is beneficial for the borrower as it results in lower EMIs and puts less financial burden.
Easy & hassle-free approval processloa
Given the availability of a residential or commercial property to put upfront as a collateral, getting an approval for loan against property is much easier, quick, and hassle-free. Since the nature of loan is secured, the documentation requirements for a loan against property are also minimal with many lenders offering online application process as well.
Easy eligibility criteria
The eligibility criteria for a loan against property for both individuals and business owners are quite basic and easy to meet. Though the eligibility factors differ for salaried and business owners, basic parameters like age, income, and credit history are common for both categories.
Flexible usage of loan amount
The loan amount sanctioned through a loan against property can be utilized for various purposes like home renovation/expansion, wedding, higher education, medical expenses, and so on. There is no restriction on the end use and the borrower is free to use the amount as per their requirement.
Factors to Keep in Mind Before Applying for a Loan Against Property
- Before applying for a loan against property, review and compare the lenders that offer a competitive rate of interest along with flexible repayment tenor. This will save you from making any mistake going ahead and the sudden surprises later.
- You must have a clear loan amount that you want to apply for. Do your math properly and ascertain a loan amount after keeping in mind the purpose of taking the loan and the related additional expenses.
- Know the eligibility criteria clearly beforehand to avoid the chances of rejection of loan application in the later stages.
- Start preparing on building your credit score ahead of time to have a sound credit profile. Your credit score, along with the completed property documents, will play a major role in the outcome of your loan application process.
- Get an estimated value of the property you’re going to put as a collateral. This will help you ascertain the maximum loan amount you can apply for.
Loan against property in India is one of the easiest options to fund your life and business goals without any hassle. With reduced interest rate and lower EMIs, the financial burden on the borrower is significantly less and you can put the loan amount to constructive use.
If you wish to convert your property into an easy source of funding, reach out to us! Write to us at firstname.lastname@example.org or visit here to let us assist you in applying for a loan against property conveniently.