Loan against property is one of the most sought after financial services taken by individuals who own a property- residential or commercial, to fund another expense like a wedding, education or renovating the house. Properties are valuable assets that can be put to good use when in need of a substantial amount of money. It is one of the cheapest loans available because of the nature of the pledged assets. Applying for a loan against property is simple and hassle-free for applicants. You can either fill out the form at a nearby branch of your preferred lender or also online. Documents need to be scanned if you decide on proceeding with the loan online. These are high-value loans at affordable interest rates that are designed to rescue individuals out of their financial problems.
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There are a few major benefits of a loan against property because of it being a secured loan. Unlike a collateral free loan, secured loans warrant some asset to be pledged as security from the borrower. A secured loan has inherent benefits in them and it is pertinent to know all about them as potential applicants.
1)Loan Amount Loan Against Property:
The bank is less apprehensive of lending against property serving as security deposit. About 70 to 80 % of the current market value of property is granted as loan by the lending authorities in such loans. The amount of loan is proportional to the value of property. Individuals have the liberty to draw out huge sums as a result of this feature of loan against property. Market rates of the property are subject to variation. It is important to keep this in mind while opting for the loan.
2) Option for Longer tenure:
As a loan applicant, you have the option of borrowing for longer loan duration with a loan against property. If the loan amount is high, the tenure of loan can go up to
20 years in some cases. This provides enough leeway for loan borrowers to assess their financial situation and repay the loan at regular intervals. Easy repayment facilities are made available to the borrower for their convenience.
3) Lower interest rates Loan Against Property:
A property, whether commercial or residential, rented or not, is an asset which serves as a reliable security deposit. Banks and other lending institutions are willing to loan huge sums at relatively lower interest rates against property. When it comes to unsecured loans like personal loans, the interest rates are much higher. Loan against property is one of the cheapest options when it comes to fulfilling a financial need with a loan service.
There are other benefits associated with a loan against property and they are listed below. These are to be taken into consideration in case you have a property in the family which can be leveraged to bridge some financial gaps.
Loan Based on two Facilities
This type of loan allows you the liberty to repay the amount in two ways- EMIs or overdraft facility. Property according to its market rate is evaluated properly and after taking into account your credit history, the lender zeroes in on the overdraft limit.
A loan against property can be utilized for funding education, wedding expenses or even starting a business. The capital can serve multiple purposes and the bank does not interfere in the way you utilize the funds received through the loan amount.
Top up facility
Loan applicants face a pertinent problem of lack of funds at a stage of repayment of existing loan. A top up facility comes in handy at such a time, not only to pay off the sundry maintenance costs but also to take care of any unforeseen expenditure that pops up.
Loans come in different shapes and sizes which makes it all the more important for loan applicants to do their research on the subject or best-suited product. Different lending institutions have different policies due to which their interest rates and other charges like processing fee, prepayment fee, foreclosure fee will vary. It is absolutely essential to take these factors into consideration while going for a loan. Loan against property is offered by over 20 reputed banks, comparing them and assessing your requirement carefully is of paramount importance.
Most Indian households believe in investing a property because of the general importance placed on the institution of family. Loan against property can be applied for on your self-occupied residential properties as well. All properties, whether rented or self-occupied, come under the purview of loan against property. Good financial sense would suggest any loan applicant with a property to go for this kind of a loan over a personal loan or swiping credit cards at will. The risk involved in incurring interests on a credit card is much higher than it is perceived by the layman generally. Loan against property is without a doubt, the best borrowing option when you have a property.