A debt burden is the last thing you would want on your hands. It can drag you for years, stressing your life, and taking a toll on your finances. In such scenarios, looking for ways to get done with the loan is the best thing you can do. Your one option is to take a loan to repay the loan. There are several loans available in the market that can be used for such instances. However, it can be scary to take a loan like debt consolidation as they come with higher interest rates, and it isn’t always possible that the lending institution will grant you the loan considering your vulnerability to repay the loan.
In this situation, there is one loan that can prove to be a boon. A loan against property is your best bet in case you are under a huge debt burden. Since it is a secured loan, lending institutions may sanction it, given that you own the property and put it as collateral. However, you will still have complete ownership of your property.
If you have a debt burden, here is how you can reduce it with a loan against property.
#1 LAP gets you substantial funds – pre-close your loan
One of the primary reasons why people over-burdening with debt choose to avail a loan against their property is that the loan amount is significantly higher than other loan types. So, you will get surplus funds to clear off your existing debts with ease. Since the loan amount depends on your property’s market value, you can expect it to be higher as property rates are most of the time on the higher corner. So, you can probably repay your existing debts all at once with a LAP.
#2 Increase your EMI
With LAP, you get a chance not only to pay all your debts but also to improve your credit score. You can start paying high monthly installments using the loan amount. And the best part is that the higher your EMI for the existing debts, the lower will be the interest rate charged. The loan against property interest rate is comparatively lower. So, it is much easier to repay the LAP than the other debts.
The best part about taking a loan against your property is that you can repay it within a long tenure without any hassle. The majority of the lenders provide LAP for tenure as long as 15 years, and in some cases, it can go up to 20 years. Longer tenure means the monthly installments are lower. So, you have the peace of mind when it comes to repaying the LAP. And most importantly, the ownership of the property remains under your control throughout the tenure.
These are some reasons why people overburdened with debt choose to clear off things using a loan against their property.