A medical emergency may rear its ugly head when you are least prepared. And, the cost of quality healthcare is often beyond the reach of an average middle-class Indian.
A loan against property or LAP loan may come to your rescue during those times. Read on to know how you can use a LAP loan to save someone’s life when they are in danger.
What is LAP Loan?
A LAP loan is one of the simplest loans you can avail if you own residential or commercial property. To get the loan funds, you have to pledge your property with the lender. After pledging the property, you can continue to live in it. A LAP loan is the finest way to monetise an idle asset.
You may use the loan against property funds to pay hospital bills, buy medicines, fund an expensive operation or surgery, or undertake life-saving medical therapies.
However, before committing to a LAP loan, you need to know about the loan against property eligibility, documentation, application and approval process, and rate of interest.
Here is a ready reckoner of the things you need to know.
Loan Against Property Eligibility
Any Indian citizen between 21 and 60 is eligible to apply for a LAP loan. Additionally, you need to have the ownership rights of a dispute-free property. You can avail a LAP loan by mortgaging any of the following three types of properties:
- A self-occupied, vacant, or rented-out commercial property
- A self-occupied, vacant, or rented-out residential property
- A plot of land
Note – A decent credit score and monthly income may increase your loan against property eligibility.
Documents Required
To avail a LAP loan, you have to submit the documents listed below. However, some lenders may also specify a few additional documents. Hence, it is better to cross-check with the lender before arranging the documents.
The documents you need to submit are:
- Application form with photograph
- Age proof
- Identity proof
- Address proof
- Latest degree certificate
- Form-16
- Income Tax Returns
- 3-months’ salary slips and appointment letter (for salaried)
- Proof of business and Profit & Loss statement (for self-employed)
- 6-months’ bank account statement
- Property papers, including title deed and land documents
- Processing fee cheque
Note – Keeping the documents in order may expedite the process of loan approval.
Application and Approval Process
There are two ways to apply for a LAP loan – online and offline. If you need money for a pre-planned medical treatment, you may apply through the offline mode. If, however, you need cash quickly, it is better to go through the online route. The processing and approval time of an offline LAP loan is generally higher than the online mode. When you apply online, the lender usually processes your application within 24 hours and sends a loan officer to your registered address. The officer verifies the original documents and appraises the property. The loan gets approved within 24 hours of property and document verification.
Interest Rate
The interest rate of a LAP loan depends on factors like credit score, monthly income, and property valuation. If you score high on all parameters, you can get the lowest LAP loan interest rates, which at present, start from 9.50%. However, to receive the lowest interest rate, you need to satisfy the loan against property eligibility criteria.
Conclusion
LAP loan funds can help you massively when you are short of cash and have to deal with a medical emergency. Make sure you read the terms and choose an appropriate loan tenure to get the maximum benefits from a loan against property.
