5 Important Reasons to Opt for a Loan Against Property to Start Your Own Business_banner

Banner-Dynamic-Scroll-CockpitMenu_LAP

5 Important Reasons to Opt for a Loan Against Property to Start Your Own Business_WC

2 min 10 Feb 2023
Reasons to Opt for Loan Against Property
Highlights
  • Reasons to Choose Loan Against Property to Start a Business

Not everyone wants to live the routine life, not everyone feels happy slogging 10 hours in an office. Some people enjoy working for themselves, they dream of creating things and products they will be remembered for. Unfortunately, setting up one's own business is no easy task - a great idea is a must, but you also need working capital to ensure your idea reaches people. 

If you need funds to enter the world of entrepreneurship, a Loan Against Property can help you realize your dreams. 

A Loan Against Property is a type of secured loan under which a borrower pledges their property as collateral. This property could be commercial or residential or even a piece of land that you own. The property pledged must have a clear title and should be free of disputes. The lender will assess the value of your property and sanction anywhere between 60% to 70% of the property's market value as a loan. Like in the case of any other loan, once the loan tenor begins, you will repay the loan in the form of EMIs. However, you will get ample time due to the flexible repayment tenor associated with Loans Against Property to repay the loan, making the whole process easier and completely stress-free. 

The question is, when there are so many loans options available in the market, why should one opt for a loan against property for business growth. Let us look at 5 reasons why this loan tool is the ideal choice for aspiring entrepreneurs.

5 Reasons You Should Choose Loan Against Property to Start Your Own Business

1. Low Interest Rates

Loans Against Property are secured loans. They involve collateral and therefore, the risk involved for the lender in lending the borrower money is quite low as the lender can sell the property for loan recovery. Lenders, therefore, sanction these very low loans at low-interest rates starting at 9.40%* p.a. for good credit scores. In fact, Loans Against Property are the second cheapest loans after Home Loans. On the other hand, loans, such as gold loans and personal loans, draw a very high rate of interest and are, therefore, not a feasible or affordable choice for anyone starting a new business.  

2. Flexible Repayment Tenor 

Most unsecured loans must be repaid over a period of 5 to 7 years. Such a short tenor leads to high EMIs, leading to the loan becoming unaffordable for the borrower. Loans Against Property come with a long repayment tenor stretching up to 17 years. Thus, a borrower can even avail of a hefty sum and pay it off slowly in the form of small, affordable EMIs.

Also Read: Pick the Right Loan Against Property Tenor 

3. Substantial Loan Amount

Starting your own business means you must have access to a decent amount of money. While a personal loan will give you immediate access to a small sum falling in the range of Rs.15 to Rs.25 Lakh, it is quite likely that this money won't be enough to take care of your needs. Under a Loan Against Property, lenders offer 60% to 70% of a property's value as a loan. As an example, if the property you are pledging as collateral is valued at Rs.1 Crore, you will easily get access to anywhere between Rs.60 Lakh to Rs.70 Lakh as a loan. Thus, under Loans Against Property, borrowers can get access to a much higher sum. In fact, with a lender like Bajaj Housing Finance, one can get access to a sum as high as Rs.5 Crore* or more, based on eligibility.  

4. Quick Approval and Continued Usage of Property 

When it comes to Loans Against Property, lenders are quite cautious about who they are lending money to. They take their time to check whether the property being pledged as collateral has a free lien and is free of any kind of dispute. Thus, when you apply for a Loans Against Property, your lender will hire a legal expert to check the property being pledged as well as assess its value. These things take time, but lenders try their best to wrap up the whole process within a week or two. In fact, there are some lenders in the market who sanction and disburse loans within 72 hours* of document submission and approval. So, if you need money urgently, you can go to a lender known for speedy approval.

Yet another reason why you should take a loan against property to take care of your business needs is that a LAP allows a borrower to unlock the value locked in a property while giving them full rights to continue using the property as they like. In other words, you can still inhabit your home or rent out the shop against which you have taken a loan.

5. It's Safe and Convenient 

Lastly, you should opt for a Loan Against Property because these loans are safe and convenient. Though they involve collateral, your lender has no rights over your property if you continue to pay your EMIs on time. However, since Loans Against Property involve collateral, borrowers must borrow these loans after proper financial planning and borrow only as much as they can easily repay. 

Final Words

 If you are someone who dreams of starting their own venture but lacks the funds to do so, a Loan Against Property can be the answer to all your problems.

Also Read: Why Loan Against Property can be a Good Credit Option for a Startup Business? 

*Terms and conditions apply.

Blog-Intro-Disclaimer

DISCLAIMER:

While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.

Asset Publisher

Trending Articles
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Things You Need to Know Before Applying for a Loan Against Property
2024-12-02 | 3 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

How Can a Loan Against Property Help You Expand Your Business?
2024-12-02 | 5 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Benefits of Loan Against Property EMI Calculator
2024-12-03 | 3 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Top Benefits of a Loan Against Property Over Collateral-Free Loans
2024-01-09 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

A Complete Guide for Home Loan Insurance
2023-04-03 | 4 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

What Are the Eligibility Criteria for Obtaining a Loan Against Property?
2023-03-28 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Advantages for First-Time Home Buyers
2023-07-14 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

All About Home Loan Balance Transfers
2024-06-04 | 4 mins
alt
home+loan Home Loan

[N][T][T][N][T]

All You Need to Know About Home Loans
2023-01-19 | 5 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Understanding the Fees and Charges on Your Loan Against Property
2024-02-16 | 8 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

3 Different Loan Against Property Types You Should Know About
2024-02-13 | 5 Min
alt
home+loan Home Loan

[N][T][T][N][T]

6 Ways to Reduce Your Home Loan Interest
2024-03-20 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Benefits of a Home Loan
2023-02-20 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Home Loan Burden Management: Five Tips
2022-06-27 | 3 min
alt
home+loan Home Loan

[N][T][T][N][T]

How to Pay Off Your Home Loan Quicker
2024-03-11 | 4 Min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Things to Do If Your Loan Against Property Application Gets Rejected
2023-02-14 | 5 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Pay-off Your Debt with Bajaj Housing Finance Loan Against Property
2024-02-14 | 5 min
alt
home+loan Home Loan

[N][T][T][N][T]

Types of Home Loan Charges
2024-01-22 | 3 Min

Call_And_Missed_Call

RHS-insurance-ad-card