Your property could be the best option for you at a time when there is an emergency and you need immediate funds at this time of slowdown when getting a loan approved is not at all an easy task.
Although money can be arranged through various routes such as personal loans but with monetary authorities increasingly lowering interest rates, loans against your property are cheaper and more feasible than the personal loans.
Loan against Property (LAP)
A loan against property (LAP) refers to the loan given against the property that is kept as a mortgage with the lender. It basically falls under the secured loan category where the borrower gives a guarantee by using his property as a security. Here the right to ownership of the property remains with the borrower.
Normally the banks extend loan amounting to a certain percentage of the market value of the property. This percentage differs from lender to lender but usually it ranges at around 40%-60% of the property's market value.
Moreover there are no restrictions on the purpose for which the LAP can be used. One can apply for a loan against property to meet marriage expenses, pay off huge medical bills, to meet holiday expenses or fund the child's higher education. It can even be used to pay off existing high rate loans. In fact this loan can be used for almost anything as it is backed by a sound security.
Any property whether it is rented to someone or self occupied by the applicant is eligible for mortgage that is to be kept for a loan. Even a piece of land can be used to take a loan against property. However some lenders do not approve a rented property for loans.