8 Reasons Why LAP is a Better Choice to Fund Your Kid’s Education

• Since your property is used as a mortgage, it attracts lower rate of interest

If you are seeking a loan at a lower rate of interest, LAP is an apt solution. However, your rate of interest will also be influenced by other factors such as

• Your credit history
• Employment history
• Salary/Income
• Type of property
• Nature of work

Choose a lender who offers fair value of your property and favorable rate of interest in relation to your portfolio. This is where a healthy financial history comes handy for negotiating a better rate of interest.

Also Read: Resolve Financial Emergencies with a Loan Against Property

• Easy to avail since it is a secured loan

Most traditional as well as non traditional financial institutions are willing to provide an LAP simply because property is an attractive asset in financial terms. Hence, this type of loan is more beneficial.

• Longer Tenure

Typically, the duration of repayment of a LAP goes up to 15 years. This allows you enough time to comfortably pay off the EMIs.

• Faster disbursal

Since LAP is a secured loan, disbursal is typically faster. Hence, if you are in immediate need of funds for seeking admission for your child, then you can apply for an LAP. However, ensure that your property and related documents are in place if you need to seek funds on a fast-track basis.

• Better option than education loan

While filling out the loan against property application form, you may wonder if education loan is a better option.

Education loan Vs LAP

Education loan is a personal loan, hence, attracts a higher rate of interest. Property is a valuable asset in terms of market value. So, the chances of getting an LAP approved are higher. In short, if you have a property, it is recommended to raise funds against it.

Also Read: Rules To Follow While Taking A Loan Against Property

Final Thoughts

Typically, your residential or commercial property, plot of land is eligible property for loan. However, these days, non conventional assets such as farm houses, guest houses, schools, etc. are also eligible for loan. However, ensure that the title of the property in question is clear and there is no encumbrance or litigation pending on the asset whatsoever. Additionally, your property must also be insured and well-maintained.