Udyog LAP vs. Udyog LAP Flexi Funds: What Should You Choose?

Looking to scale your business with a mortgage loan but find yourself torn between a Udyog Loan Against Property (Udyog LAP) and Udyog Loan Against Property Flexi Funds? 

 

Imagine you have a toolbox in your garage, filled with different tools for different jobs. The Udyog LAP and Udyog LAP Flexi Funds are like two distinct tools in your financial toolkit, each serving a unique purpose. Let's explore these tools and see which one fits your needs best!

 

Tool1: Udyog Loan Against Property (Udyog LAP)

Let’s say you own a house, an apartment, or a piece of land – your valuable property. Now, let's say you're in urgent need of money. You can leverage your property as collateral and secure a Udyog Loan Against Property. The entire loan amount becomes available for your use, with EMIs kicking in once the loan is disbursed. 

 

Example of Udyog LAP: Let’s say you are running a grocery store. You want to renovate the interiors of the store to make it more aesthetically pleasing and convenient for usage. 

 

With Udyog LAP, you can mortgage your property and get the entire loan amount that can be used to remodel your store.

 

Also Read: A Comprehensive Guide to Business Loan Against Property: Everything You Need to Know

 

Advantages of Udyog Loan Against Property:

Low interest rates: Due to the collateral, lenders feel secure, resulting in lower interest rates compared to other types of loans.

 

Pro tip: Use EMI calculator to prepare for your EMI payments efficiently and manage your finances easily.

 

Higher Loan Amounts: With secured loans like Udyog LAP, the loan amount tends to be higher based on your property's value. Depending on business cashflow needs, you may be eligible for a high loan amount.

 

Full amount disbursal: You can receive the entire loan amount at once, ideal for long or short-term projects.

 

Multiple income sources considered: Many a times, small business owners have multiple income sources - cash, online, bank transfers, etc. With Udyog LAP, all your income sources are considered. Plus, there's minimal documentation required with maximised eligibility.

 

Tax benefits: In India, individuals enjoy tax deductions on interest under Section 37(1) of the Income Tax Act, if used for business or new residential property purchase.

 

Tool2: Udyog Loan Against Property Flexi Funds:

Now, let's understand Udyog Loan Against Property Flexi Funds and how it can support your business cashflow. Udyog LAP Flexi Funds is a facility like an Overdraft (OD). 

 

Wondering what is meaning of Overdraft? Think of it as a safety valve that allows you to withdraw money whenever needed from a sanctioned limit. Udyog LAP Flexi Funds is designed with a similar concept.

 

With Udyog LAP Flexi Funds, instead of receiving the entire loan amount upfront, you get a predetermined sanction limit. From this limit, you withdraw funds as per your business requirements. The best part is that the interest is charged only on the utilized amount.

 

Example of Udyog LAP Flexi Funds: Let’s say you run a grocery store. For an upcoming festive season, you need to stock up certain items to meet the increased demand. Thus, for a temporary time, you need extra funds to keep the business running. 

 

So, instead of the entire loan amount, you only withdraw the extra funds you need from your Udyog LAP Flexi Funds account. Similarly, whenever there’s festive season, you withdraw only the shortfall of funds to manage the cash flow. With Udyog LAP, you pay interest only on the funds you utilise and can repay whenever you find it convenient. 

 

Also Read: Overdraft Facility and Flexi Funds: All You Need to Know

 

Advantages of Udyog LAP Flexi Funds:

Interest payment is flexible: You only pay interest on the amount you use, with the flexibility to repay whenever funds are available.

 

Higher limit: Once approved, you can access the Udyog LAP Flexi Funds facility with a high limit. In just a few clicks online, you get access to funds that become available whenever you need. Thus, you will not need to go through the loan process again and again.

 

Easily Accessible Funds:Udyog LAP Flexi Funds offer a convenient solution when you need money for short-term projects or unexpected expenses. Instead of getting all the money at once, you can withdraw only what you need from your sanctioned limit, keeping a reserve for future needs.

 

Business Growth: Udyog LAP Flexi Funds are ideal for managing business cash flow. The flexibility to withdraw and repay based on your needs makes it attractive for business owners facing revenue fluctuations or seasonal changes.

 

Difference Between Udyog LAP and Udyog LAP Flexi Funds:

So, which option should you lean towards?

 

• Opt for Udyog LAP If: You need a substantial amount for long-term investments and are comfortable putting your property up as collateral. Udyog LAP also suits those who prefer lower interest rates and longer repayment periods.

 

• Opt for Flexi Funds If: You have short-term cash flow needs or require flexible funds to manage business expenses. Flexi Funds are ideal for quick access to funds, even if the interest rate is only slightly higher.

 

Godrej Capital's Offerings:

At Godrej Capital, we understand the diverse needs of businesses, which is why we offer both Udyog Loan Against Property and Udyog Loan Against Property Flexi Funds. With tailored loan solutions and flexible repayment plans, we empower businesses to thrive. 

 

Here's a comparison of UDYOG LAP and Udyog LAP Flexi Funds:

 

Final Thoughts:

Both Udyog Loan Against Property and Flexi Funds come with their advantages and considerations. It's crucial to carefully weigh your options, considering factors like interest rates, repayment terms, and the purpose of the loan. 

 

Remember, borrowing money is a significant commitment, so ensure you're comfortable with the terms and confident in your ability to repay. Happy borrowing!

 

Apply now for Godrej Capital Udyog Loan Against Property or Udyog Loan Against Property Flexi Funds

 

Looking for more information? Visit our Knowledge Centre

 

Related FAQs – 

Q.1. Can I get a Udyog Loan Against Property to renovate my office?

Yes, you can secure Udyog Loan Against Property to renovate your office.

Q.2. What is the difference between the Overdraft facility and Flexi Funds?

Flexi Funds is an overdraft-like facility and both are similar to each other.

Q.3. What is Design Your EMI in Udyog Loan Against Property?

Godrej Capital offers flexible repayment solution with Udyog Loan Against Property, also known as, Design Your EMI (DEMI). With this feature, you can pay interest-only for select months during your loan tenure. It can help you manage seasonal fluctuations and manage your cash flow more easily. Read more here.

Q.4. Can I get Udyog Loan Against Property if I don’t have a property to mortgage?

Udyog Loan Against Property is a secured type of loan and can only be secured if you have a property to mortgage.

Q.5. How can I withdraw money from my Overdraft account?

Each lender will have their own process to withdraw funds from an Overdraft account. With Godrej Capital’s Flexi Funds, an overdraft-like facility, you can access and withdraw funds in a few simple clicks online, from your Flexi Funds account.

Disclaimer: The contents of this article are for information purposes only & not a financial advisory. For more details, please refer to the product or service document and/ or connect with our customer representative prior to making any financial decision. The information is subject to update, completion, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. 

 

Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

 

Financing through Godrej Finance/Godrej Housing Finance Limited. Product Terms & Conditions apply, for details visit https://www.godrejcapital.com