It is a big decision to venture out to start a business. For many, it means leaving the security of a well-paying job with a regular income. Along with that, there are the pressures of arranging for funds, setting up the infrastructure and managing the day to day activities of running a business. One must also brace himself for the ups and downs that might accompany the business scenario.
If you have saved up for starting the business, that is very wise, but even if you do not have sufficient funds, that should not lead to you giving up your dreams. If you do wish to become an entrepreneur, there is the option of taking a loan against property. This, in fact, is one of the best options if you wish to raise funds for starting your business. The following benefits will completely justify your decision in this case.
4 Benefits of Using Loan Against Property
- Pay Lower Interest Rates
If you choose to take a business loan or even a personal loan, you would end up paying much higher interest to the lender as compared to a loan against property. This itself is a big advantage when opting for LAP. With the help of a loan against property EMI calculator, you can find out the exact EMIs that you would need to pay. The smaller EMIs will enable you to manage the finances better and run your business with greater efficiency and lesser stress.
- Pay Over a Longer Duration
The repayment tenure for a business loan or a personal loan is also much shorter when compared to LAP. Tenure of 15 years is certainly more lucrative than that of 5 years. A low-interest rate combined with a longer tenure assures smaller EMIs and lower stress for you. If you have the capability of paying larger EMIs, you can always opt for a pre-closure. This may or may not have a penalty depending on the terms and conditions decided with your lender.
- Experience Smooth Approval Process
The eligibility criteria for a loan against property are simple. You must have a property that is free of any litigations. You must be at least 18 years old when taking the loan and not more than 65 years at the end of the tenure. You could need to produce account statements to support your loan request and verify your capability of repaying the same. Once all the documents have been verified, the loan can be approved quickly and you can soon receive the money in your account.
- Continue to Own Your Property
When you take a loan against a property you own, you need not give it up. You can actually continue to use it just as you were using it before you took a loan. The lender only needs the documents of the property as collateral. These are returned to the owner once the loan has been successfully paid off. The property might be one that you are residing in or maybe have rented out. It could also be a commercial property or one that you are developing for further use. The loan does not require you to change the status of your property.
Once you have taken the loan against property, you can use it as a deposit, you can use it to buy equipment or set up an office. If you have any surplus amount, you can use it for any other activity as well. You are not restricted by any regulations on this particular loan. It is for you to use as you please. But you must ensure that you are able to pay the EMIs on time or you could risk losing your property.