Loan against property is a convenient way to get access to immediate funds, because your property acts as collateral. The loan value is calculated based on the property value and the loan repayment period can be between 6 months and 5 years. Besides, you’ll have low interest rates starting from 10%, which makes it a very popular choice.
Loan against property is a secured loan that is advanced by mortgaging a self owned property (residential or commercial) with the lender. Both the title of the property and the person are pledged as security to pay off the loan in case of default by the borrower.
The popularity of loan against property is increasing, due to the variety of funding benefits it offers and the tax benefits that it enjoys. It is a secured loan. The main advantage of this type of loan is that the borrower can use his property as collateral for making the loan, thus limiting his liability in case of any default from his end. This is because in cases of default on the part of the borrower, the lender has the right to sell the property (based on which this loan was provided) without any further notice.
HIGH LOAN AMOUNT WITH EXTENDED REPAYMENT TENURE
With the High Loan Amount and Extended Repayment Tenure, your loan amount can be as high as 60 percent of the market value of the underlying property and it can be repaid in installments up to 15 years.
LOAN CAN BE UTILISED FOR MULTIPLE PURPOSES
The lender does not restrict the use of the amount loaned to you for investment purposes or for household expenses. Any borrower who has a source to repay the loan as and when it falls due is welcome to apply. The lender is an intermediary who lends the funds on an on-lending basis.
IMPORTANT LOAN FEATURES
ELIGIBILITY
The eligibility criteria for a loan against property will depend mainly upon your present income and other factors such as what kind of loan you are applying for, the purpose for which you need the loan, and so on. What is common to all these loans is that the property which you plan to use as collateral should be free from any of the encumbrances or defects. It should also have a proper title deed and current registration certificate.
DOCUMENTATION
The process of getting a loan in India begins with submission of a loan application. You will have to furnish proof of your identity, address and income to your bank or financial institution. With documents and information like the property valuation report for endorsement by the lender, the whole process may stretch up to 45 days.
LOAN PROCESSING
Loan processing may take between one and three weeks. During this period the lender will check your financial capacity to meet the repayment obligation, for which a field visit will be made to assess the property as collateral. If you would like to speed up the process, we advise you to factor in more time and we will ensure that every consideration for a quick turnaround is made. During this period we also recommend that you make contact with a representative of the bank, so that he/she is apprised from inception, of exactly what it is that you require.
COSTS
To calculate costs, add the interest rate , processing fee, stamp duty, and based upon the terms of the loan, other charges may also apply – please ask a Financial Advisor if you require more information on home improvement loans. While all care has been taken to ensure the accuracy of the cost information herein, this information is general in nature and lenders’ costs may vary. Fees and charges are subject to change or removal at any time.
