3 Mins Jan 4, 2022
Krishna Raju, who owns an auto ancillary unit in Coimbatore wants to expand the capacity in his factory as orders have picked up since the easing of the lockdown. To fund the expansion, he is considering taking a Loan Against Property (LAP).
Here is why:
Unlock the funds in an illiquid asset
While a property is an important asset, often the most significant asset that a person owns, it can't be easily monetised, unlike stocks, mutual fund units or fixed deposits. Selling
a house takes time and can't be done in a hurry.
LAP allows you to unlock the funds in illiquid assets and use them for business and personal purposes you may need.
Business & Personal use:
The money that you borrow in a LAP doesn’t come with any condition. You can use it for business or personal purpose you desire.
Competitive interest rates
LAP comes at competitive rates because it is a secured loan.
LAPs come with tenures, extending up to 20 years for salaried people and 15 years for the self-employed. This means that the borrower has the comfort of paying a lower EMI (Equated Monthly Instalment),
making them more affordable.
[Also Read: Loan Against Property: What You Need To Know]
Higher loan amount
By opting for a LAP, you can also borrow a higher amount. With a LAP, you can borrow up to Rs. 5 crore, depending on the property's value. Generally, banks get the property to be mortgaged valued and offer
a loan between 60-65% of the valuation.
To avail of a LAP, a borrower must submit all KYC documents (proofs for identity, address and signature), income statements for two years, bank statements for six months, and Income Tax returns. You
will also need to submit documents related to the property showing that it is free of all encumbrances and liabilities and registered in your name.
Axis Bank’s Loans Against Property interest rates offered are competitive. The tenure of such loans can extend up to 20 years for
salaried people and 15 years for the self-employed, and you can borrow up to a maximum of Rs. 5 crore.
Know more about Axis Bank Loans Against Property online.
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