Unleashing The Power Of The Loan Against Property Interest Saver
You can raise funds for your home in many different ways. One of them is to unlock the value of your immovable property. You can raise funds by taking a loan against the property you possess. Loan Against Property (LAP) is a loan disbursed against the mortgage of your property with the lender. It is extended against the latest market value of the residential or commercial property owned and lent.
What if you can decide the amount of money you want to pay while taking an LAP? What if LAP facilitates saving the cost of interest and repaying the loan much faster?
Here's a list of features and advantages of Loan Against Property Interest Saver (LAP-IS).
How does the LAP-IS work?
It is mandatory to open a Flexi Current Account while availing LAPIS. The interest liability of your LAPIS loan account comes down to the extent of the surplus funds parked in your operative flexi current account. In other words, LAPIS allows you to link your loan account with your flexi current account. You will be allowed to withdraw or deposit funds from your operative flexi current account whenever you need.
Now, you must be wondering, how the product helps you save the interest cost and repay the loan faster.
The answer is here.
The Interest on your LAP-IS loan will be calculated on the outstanding balance of loan minus the balance in the flexi current account that you maintain at the end of the day. The greater the balance in your flexi current account, lesser will be the loan interest paid on LAP-IS.
Q. What is the minimum and the maximum loan amount for LAPIS?\
A. The minimum loan amount for LAPIS is 10 Lakhs, and the maximum loan amount is Rs. 10 Crores. Some banks also consider loan proposals up to Rs. 25 Crores as well, on a case-to-case basis.
Q. What is the loan tenure for LAP-IS?
A. The loan is provided up to the period of 15 years. There is no Moratorium (i.e. a legal authorisation to debtors to postpone payment for a certain period) in Lap-IS.
Q. What are the facilities being offered on Flexi Current account?
A. A Flexi Current Account offers the applicant a 'Zero Average Quarterly Balance' facility. An applicant can also withdraw or deposit amount in his flexi current account, as and when required. A cheque book, ATM-Debit Card and Internet banking facilities are provided for operating the flexi current account.
Q. What is the maximum funding for LAP-IS?
Type of Property
Market Value of the Property
Residential Self Occupied
Up to 65%
Residential Leased Out
Up to 55%
Up to 50%
This may vary from bank to bank.
Q. What is the primary security for LAP-IS? Is it mandatory to have secondary collateral?
A. The primary security is the first charge on the property by way of equitable mortgage created by the lender. Secondary collateral is not mandatory, but the lender may ask for liquid collateral if necessary.
Q. What is the difference in the terms of rate of interest between LAP and LAP-IS
A. The difference between the LAP and the LAP-IS may vary between 0.25 per cent-0.50 per cent. This may vary from lender to lender.
- You can deposit your excess savings, annual bonus amount or any form of surplus money in your flexi current account. You can also enjoy the flexibility of drawing out the money whenever you need.
- You can deposit your savings in the flexi current account, and can benefit saving on your loan interest to the extent of the amount deposited.
- A flexi current account can be used like a normal current account. Thus, LAP-IS is the product best suited for businessmen.