Loan Against Property (LAP) comes in various forms, used to different financial needs and requirements. Here are some common types of Loan Against Property:
1. Residential Property Loan:
- This is the most common type, where individuals pledge their residential property (house or apartment) as collateral to secure a loan.
2. Commercial Property Loan:
- Similar to residential property loans, commercial property loans involve using commercial properties, such as office spaces or retail outlets, as collateral for obtaining funds.
3. Loan Against Plot:
- Some financial institutions offer loans against vacant plots of land. Borrowers can use the funds for various purposes, including construction or investment.
4. Lease Rental Discounting (LRD):
- In LRD, the loan is provided against the future rental income of a commercial property. This is commonly used by commercial property owners to unlock the present value of their rental income.
5. Top-Up Loan Against Property:
- Borrowers who have an existing LAP may be eligible for a top-up loan, which is an additional loan amount on top of the existing loan. This can be availed for the same property and is often used for additional financial needs.
6. Overdraft Against Property:
- Some financial institutions provide an overdraft facility against the property. In this type, borrowers are given a credit limit, and they can withdraw funds as needed. Interest is charged only on the amount utilized.
7. Loan Against Property for NRI (Non-Resident Indian):
- Financial institutions may offer LAP specifically designed for NRIs, allowing them to leverage their property in India for financial needs.
8. Loan Against Property Balance Transfer:
- Borrowers can opt to transfer their existing LAP from one lender to another for better interest rates, terms, or additional features. This is known as a balance transfer of a Loan Against Property.
9. Professional Loan Against Property:
- Some lenders offer LAP specifically designed for professionals like doctors, lawyers, or chartered accountants. These loans may come with tailored features to suit the financial needs of these professionals.
10. Government and PSU Employee LAP:
- Some financial institutions provide LAP schemes exclusively for government and public sector undertaking (PSU) employees. These loans may have specific terms and conditions catering to the needs of government employees.
It's important for borrowers to carefully evaluate the terms, interest rates, and eligibility criteria associated with different types of Loan Against Property before choosing the one that aligns with their specific financial requirements.
