What is a loan against property?
A loan against property can be acquired on any type of property such as commercial, residential, or even a plot of land and since these loans are secured the lenders are less hesitant to approve these loans because if the borrower defaults on their monthly payments the lender is well within their right to liquidate the property and recover the loan amount.
What are the benefits of a loan against property?
There are many benefits for the same, here is a detailed list of the same:
- Approval:
The approval rate of a loan against property is higher when compare to other forms of loan as a LAP is secure. After going through your documentation for eligibility the funds are directly transferred to your bank account within 72 hours. The overall experience of applying for a loan against property is smooth and straightforward.
- High-Value:
Loans against properties disburse based on the market valuation of the property. The property valuation is much higher in comparison to others such as personal loans and gold loans. So any large expense that you may have can be tackled easily with a loan against property.
- Long Tenors:
Since a loan against property is of higher value it takes much longer to repay the loan. Usually, the tenor of these loans ranges between 18-20 years, and in case you want to opt for a shorter term of 5 years you can do so but it is important to understand that the monthly installments would be much higher hampering the affordability of the loan.
- Interest Rates:
The interest rates on a loan against property are much lower when compared to other forms of loan as a LAP is secured. The usual rate of interest ranges between 10-14% and if your CIBIL score is on the higher side there is a good chance that your interest rate could be even lower.
- Funds Usage:
Unlike other forms of loans like home loans etc., there is no usage restriction on the funds that you receive from a loan against property. You can use the funds for any expense that you may have such as wedding expenses, vacation expenses, business expansion, debt consolidation, etc.
What are the eligibility factors?
There are a few eligibility criteria when applying for a loan.
- You must be a residing citizen of India
- Must be between the ages of 28 to 60 years old for a salaried employee and between the ages of 25 to 70 years old for a self-employed individual.
- The property that is to be mortgage should be residing in India
- Proof of steady income for both salaried and self-employed individuals
- Salaried employees should have a minimum experience of 3 years in the field of employment and 5 years of experience for a self-employed individual in their field of business
What are the steps to apply?
Regardless of the location the steps and formalities for applying for a loan against property more or less remain the same across different states. Here are is how you can apply:
- Once you have established which bank or lender is offering you the best offer on a loan against property visit their website
- Proceed to the loan section of the website and download the application form
- Fill in the application form with the relevant information
- Submit the application form on the website itself
Once your loan application form is processed and approved then you will be approached by the lender for further formalities
