You work hard to purchase commercial and residential property. Now it’s time to find out how your property can help you get funding to grow your business!
What is a Loan Against Property?
When you own a valuable personal or business asset, it can be used as collateral to secure a business loan. A loan against property (LAP) can be used to meet your business financing needs by pledging your property papers as security for a business loan.
This loan can be used to finance long-term funding needs, business expansion plans, purchase new property and equipment, or refinance an existing loan.
CreditEnable’s LAP options are flexible, easy, and quick to secure.
What are the different types of LAP available?
1. Loan against residential or commercial property
This is a typical mortgage loan that an SME can take by pledging commercial or residential property papers as collateral. The amount of loan sanctioned depends on the present market value of the property, but you may be able to get a loan for about 50-80% of the market value.
2. Loan against property balance transfer
If you have a pre-existing LAP with another lender, you can transfer the outstanding principal amount to CreditEnable. We could get you a lower ROI as we will connect you to the best lender who will offer you a more affordable interest rate.
3. Loan against property top-up
In the situation when your current loan amount is not sufficient to cover your needs, you can request a top-up on the loan over and above your existing balance. You may be able to get such a top-up with just a nominal hike in your interest rate. In this case, your collateral will be reassessed, and an equivalent amount is sanctioned accordingly.
4. Loans against property overdraft
In this type of LAP, you can get an overdraft line of credit with an upper limit. You can withdraw whatever amount you need within this limit for the same repayment tenure and loan terms. Interest is only charged on the amount used, as against the overdraft amount sanctioned
Why do I need to pledge collateral to get a loan?
Large loans are a considerable risk for lenders in case a borrower defaults on their loan repayment. To make up for this risk, the lender requires you to pledge an asset. If you are unable to meet your loan repayment obligations, the lender can recover part (or all) of the principal amount by selling your pledged asset.
LAP is the perfect loan to get when you need a large loan amount for a lower interest rate. If you don’t own any property to pledge to a lender, you can consider applying for an unsecured business loan that does not require any assets.
How do I know the property I want to pledge will get me the business loan amount I need?
LAP amounts are calculated as a percentage of the current market value of the asset you pledged. You can be eligible for a loan anywhere between 50-80% of the total value. When you apply for a LAP with CreditEnable, we help you calculate the market value of your property accurately and find the right lender who can offer you the highest value possible in exchange for the property you pledge.
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