Estate Agents For Residential Houses in Panchkula

5 Myths About Loan Against Property Busted

Loan Against Property is surrounded by many myths and misconceptions that need to be dispelled.

To learn more about LAP and the ideas surrounding it, read the blog.

A Loan Against Property (LAP) or mortgage loan, to put it simply, is a secured loan that you can obtain using your home or business property as collateral.

Due to its low-interest rate and flexible end use, LAP is said to be the greatest option to meet all of your financial demands when compared to other loan types including personal loans, gold loans, and business loans.

It is very easy to apply for LAP.

All you have to do is use your real estate, whether residential or commercial, as collateral with a bank or NBFC in exchange for a sizable sum of money, and repay the loan with fixed-term EMIs.

As opposed to a student loan or a mortgage, a loan against property can be utilized to cover a range of financial needs, such as wedding expenses, higher education, house or business improvements, etc.

5 Typical Myths About Loans Against Property (LAP)

Despite being a blessing for many, loans against property are often mistaken. To learn about the LAP misunderstandings we have debunked, read on.

You Are Not Authorized to Use the Property You Have Pledged

One of the most pervasive misconceptions about LAP is the notion that you cannot reside in or use the property you have pledged as collateral to receive a loan.

This myth is untrue.

As long as you pay your EMI on time and do not default on your repayment, there is no issue with this.

So, to find out what your predicted EMIs would be if you took out a certain loan amount, utilize a Loan Against Property EMI Calculator online before you apply for LAP.

By doing so, you can determine whether you can afford the EMIs even before you apply for a home loan.

The End Use of the Funds is Limited

Another prevalent misconception about LAP is that there are limitations on how the money can be used in the end.

A Loan Against Property can be used to meet a variety of financial demands, with the exception of speculative or unlawful ones, just like other loans including gold loans, personal loans, and top-up home loans (such as for medical expenditures, wedding costs, higher education, home or business development, etc.

Only Residential Real Estate May Be Pledged

Many of us believe that the only type of collateral we may use to apply for LAP is a residential property.

This is untrue, though, as you can also use a commercial property—even a factory or a warehouse—as collateral when applying for a loan against property.

If you want to receive the loan money promptly and without any problem, all you need to do is keep all of your paperwork currents and submit genuine proof.

The Loan Amount May Be Borrowed Up to the Full Value of the Property

The exact percentage of the value of the property that a lender can finance with a loan is known as the Loan to Value (LTV) ratio.

Because of this, many buyers who apply for a Loan Against Property (LAP) think they may get one approved for 100% of the property’s market value.

The maximum loan amount a borrower may obtain, however, is determined by the value of the property, and the lender often approves loans for up to 70 to 80 percent of the value of the property.

Numerous other aspects, such as the property’s age, regional stability, and infrastructure, are also taken into account while evaluating the property.

You need to have a high income to qualify for LAP

Yes, income is crucial when applying for a Loan Against Property, but even with a small income, you can still do so.

The minimal income requirements for salaried and self-employed borrowers vary among lenders.

As a result, even if your net income is minimal, you might strive to win the lender’s trust by keeping your liabilities low and making all of your current EMI payments on time.

It doesn’t matter if you belong to the high-income or moderate-income group as long as you can persuade the lender that you can repay the loan without defaulting.


Professional brokers’ assistance can help you get the greatest deals while also relieving a lot of burdens.

In conclusion, whether you are selling or buying a residential home, the experienced and licensed Estate Agents For Residential Houses in Panchkula can offer you the greatest property counsel and get you the best offers.

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