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09 MAY, 2020
Starting a new business involves a big capital and the inability to generate as much funds can push you to reconsider your decision. However, you need not worry. A loan against property can assist you in kick starting your business venture. A secured loan, LAP or Loan against property lets you avail of a loan while you provide your property as a collateral. The loan can be used to serve any purpose and starting your business is one. Additionally, it is also popularly used for expansion of the business, promotion and further development. Loan against property can be availed against residential or commercial properties.
Here are some benefits of using a loan against property to start a business:
Highly competitive interest rates – As mentioned above, a loan against property is a secured type of loan. Thereby, the interest rates charged are relatively lower in comparison with other types of loans like a personal loan. This factor is great as you enjoy lower EMIs. You can handle your business finances with much ease without causing a strain on your budget.
Longer repayment tenor – The repayment tenor offered with a loan against property is usually long. It may range anywhere from 1 year to 15 years depending on the bank you choose. A long loan repayment tenor is very useful when starting a new business as it takes a while for your business to establish. The EMIs are lower and this eases the burden of repayment.
Wide eligibility criteria – Mortgage loan against property requires you to meet an eligibility criteria that is not too complex. The loan is offered to both, self-employed professionals as well as non-professionals. However, you must be at least be 18 years of age and not more than 65 years of age at the time of the loan maturity. The lender may also ask you to produce documents supporting your qualification statements and monthly income.
Continue holding property ownership – The greatest benefit of using a loan against property for starting your new business is that you can use the potential of your asset. However, you also continue to use and own the property or land.
A property mortgage loan can effectively serve your business needs. Ensure that you submit the essential documents and keep yourself informed about the terms and conditions. Using an LAP EMI calculator will give you a better idea of how the kind of loan can work well for you.
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