Loan against Property (LAP) is one of the key product offering by Fedbank Financial Service Limited (Fedfina). LAP is primarily aimed at serving the business needs such as purchase of machinery and other equipment, business expansion, infusion of additional working capital of the self-employed segment especially SME enterprises.
By nature LAP is a very flexible product for following reasons
- LAP helps in availing higher loan amount suited for large business investments like capital expenditure by virtue of higher loan tenures with reasonable debt repayment burden vis-à-vis short term loans
- Being a secured loan, LAP typically has much lower Interest rates as compared to unsecured loans such as BIL
- Being a fixed term loan, there is no need of annual renewal requirement as in the case of Cash Credit and Overdraft (CC & OD) limits
There are mainly two requirements for availing Loan against Property:
- An established income stream with vintage of about three to five years
- Availability of property which can be offered as collateral security
In the self-employed segment we often come across instances of under-declaration of income or partial income being declared which becomes a challenge for serving the loan requirement. At Fedfina, we have different methods of assessing the cash flows suited for varied business segments from self-employed professionals (SEP) to small manufacturers and other service providers which helps us to serve their needs.
At Fedfina, we accept collateral which can be residential, commercial or self-occupied industrial. The loan amount varies with the type and usage of the property. Additionally we offer loan for acquiring a commercial property also.
In addition to serving the business needs of the self-employed, our LAP product can be used to fulfil various personal needs also such as purchase of Assets, Marriage and Children’s education etc. by both self-employed as well as salaried segment.