Understand 5 Misconception About Loan Against Property

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UNDERSTAND 5 MISCONCEPTION ABOUT LOAN AGAINST
PROPERTY
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YOU CAN ONLY USE RESIDENTIAL PROPERTY TO PLEDGE
FOR LAP.
This is not true. You can also pledge commercial
property, even a warehouse or a factory to apply
for a Loan Against Property. You just have to
keep all the papers up-to-date and submit
authentic documentation if you want to avail of
the loan amount quickly without any hassle.
3
YOU WILL LOSE YOUR PROPERTY IF YOU DEFAULT ON
THE LOAN
This is not necessarily true. If you default on
the loan, the lender may take possession of your
property, but they will only do so as a last
resort. They will first try to work with you to
come up with a repayment plan.
4
LOAN AGAINST PROPERTY (LAP) IS A SECURED LOAN,
SO YOU WILL HAVE TO PAY HIGHER INTEREST RATES
This is not always true. The interest rates on
LAPs can be lower than the interest rates on
other types of loans, such as personal loans.
This is because the lender has the security of
your property if you default on the loan.
5
YOU CANNOT USE THE PROPERTY THAT YOU HAVE
PLEDGED AS COLLATERAL TO LIVE IN OR USE
This is also not true. You can continue to live
in or use the property that you have pledged as
collateral, as long as you continue to make the
monthly payments on the loan.
6
YOU NEED TO HAVE A HIGH INCOME TO QUALIFY FOR A
LAP
This is not true. You can qualify for a LAP even
if you have a lower income, as long as you have
a good credit score and a steady source of
income.
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