LAP loan is one of the popular loan choices among individuals as well as lenders. Lenders are more satisfied when a borrower opts for this loan. This is because it is the most secured loan type without any risks involved. In this, the borrower takes up the loan by putting their house on a mortgage. It means that if one fails to pay the loan on time the lender can easily claim your property. If you are someone who needs a loan for house construction you can go for this lAP loan. However, before opting for this loan there are many things that you need to consider.
Factors To Consider When Opting For an LAP Loan
The application process for an LAP loan is easy and quick and might not require a lot of paperwork. However, its quick approval does mean that it is the appropriate loan type for you. To check whether it is a perfect choice for you or not you need to consider some factors.
The Loan Amount: In a LAP loan you get the loan based on the value of your house. If your house market value is lower than the loan amount you are seeking. You need to talk to your lender about other options available. Sometimes lenders might grant you more than 90% of your house value based on the condition of your home. Therefore, before applying for the LAP loan talk to your lender first.
Interest Rates: While other loan options might charge you with heavy interest rates, the LAP loan offers affordable interest rates. This is because it is a secured loan and lenders do not need to worry about the loan repayment. However, even in LAP loan many bank institutions or lenders offer different interest rates. They check for credit score, loan amount, and outstanding debt to finalize your interest rates and how much EMI you need to pay for your loan.
Loan Tenure: In LAP loan you can adjust your loan tenure whenever you want to. They offer flexible tenure of up to 20 years based on your age. In the next 20 years, you can adjust the loan tenure as per your requirements. But always remember that changes in your loan tenure might also affect your interest rates as well as EMI. The longer the loan tenure the less the EMI amount but higher interest rates. On the other hand, a lower loan tenure means a high EMI amount but lower interest rates. The choice is yours so make sure you make the right decision based on your requirement.
Additional Fees: It is important to inquire about additional fees with your lender before availing the loan for house construction. The additional fees include the processing fee, prepay fee, loan closure fee, etc. If you are informed about these additional fees you can know about your loan affordability and make decisions accordingly. Different lenders charge different fees so make sure you measure all the pros and cons of a lender before opting for the loan.
Conclusion
LAP loans provide financial support to the borrower looking for a loan against their home or property . People who already own a property and take this loan to make other investments. Some take loans for home construction, purchasing land for buying a flat, etc. Besides, with its quick application process and repayment flexibility, most individuals go for this loan type. While the LAP loan does help individuals in achieving the dream of homeownership. It is also important to be well-informed in order to make a better choice.
