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Loan Against Property has been one of the most popular forms of the long-term loan that let you capitalize the financial value of a property.SFAM helps an individual to get quick access to funds by placing their property as collateral. Since it's easy to determine the value of already constructed property lenders are willing to offer loan at attractive interest rates and flexible repayment options. Repayment tenure of around 10-15 years and low-interest rate makes it an ideal choice for those who seek financial help in an emergency.

It's like your own property comes out to your rescue and lends a helping hand instead of borrowing from friends or family during financial contingencies, besides you can enjoy the occupancy of it as well. Borrowers can use the loan amount for their personal requirements which could be higher education, developing or business expansion, daughter's marriage, or other legitimate purposes.

You can keep your residential property as collateral and based on the evaluation of important parameters like income source, age, existing debt, property value lenders will sanction a particular loan amount. Generally, lenders sanction 60-65% of the property value. As opposed to personal loan/traditional finance, interest rates on the LAP are much lower with a range of mere 9.60 to 11.60 % and processing fee of just 1.25% on loan amount. You have the tenure of around 10-15 years for loan repayment along with flexible ways. You can receive the amount of loan in a lump sum or as the overdraft facility.

Before approving the LAP, financial institutions or banks will scrutinize your income, existing debt and credit score. Other than this they will quote the existing value of the property and gauge its future rate after inflation.

Experts say before you take the loan, it's better to assess the cash flow as well as your repayment capacity. People at times take a loan against property since it has low-interest rates, however, they may invest them into risky options which could be riskier. If you default, then your credit score will be affected and a penalty will be charged for this.

Some benefits of availing Loan Against Property:

1) Higher loan Amount: If you're a self-employed professional who is need of money, LAP can help you secure a higher loan amount of money provided you have an appropriate property to keep the mortgage.

2) Flexible repayments: The loan repayments can be done in part or paid entirely in advance without any charges. Your loan tenure can go up to 15 years compared to unsecured loan that only offers maximum period of 3-7 years.

3) Low-Interest Rates: Definitely, the interest margin of 9.50 to 11.50% is much low compared to personal or traditional loan rates which are hefty rates of around 14-16%.

4) Quick approvals: Approvals for LAP are quick and easy compared to new home loans since there is a collateral property to be kept towards the lenders. If documents are in place loans are approved within a day or two.

5) Hassle-free processing: LAP is processed rather quickly because the paperwork is limited and the lender has already evaluated the borrower's repayment capacity.

6) Part or Prepayment: Loan against property can be paid in part as well as in full before the tenure.