loan against property eligibilty

Things to Consider While Taking a Loan against Property

A loan against property is a great option to secure high-value funds at lower interest rates. The loans secured against high-value residential or commercial property offer up to 70% of the property value. Keep in mind the below things while taking a loan against property. 

Things to Consider While Availing Property Loan:

  • Keep Buffer Time

Enquiring about the loan disbursal time helps you plan the loan buffer time. This avoids stress due to uncertainty. Applying for a loan online quickens up the process.

  • Choose Shorter Tenure

Choosing a longer tenure reduces EMI, but the interest rates become higher. Choosing a shorter tenure helps save a good amount of funds in property loan repayments.

  • Keep the Papers Ready

Property documents are crucial for a mortgage loan. Keeping all the documents required for a mortgage loan together will help things go smoothly. It will also help to get the loan sanctioned quickly.

  • Take an Insurance

Take insurance for a higher loan amount to secure your property and reduce any risks involved. Getting insurance for a large amount can keep the loan covered during unprecedented circumstances.

  • Choose a Comfortable EMI

Calculating your monthly EMIs using a LAP loan EMI calculator helps you repay the loan without any problem. The loan against property calculator helps you choose the tenure and an easy repayment amount. Borrowing out of repayment capacity leads to late payment penalties that could be even more expensive.

LAP loans are hassle-free and offer the smoothest experience if you choose a good lending institution. The loan funds are also disbursed quickly and with utmost transparency. Apply for the loan online today!

Must Read: What are The Factors that Affect Loan Against Property Rates?

Why Loan against Property is the Best Financial Decision during Emergencies?

Mortgage loans are extremely resourceful entities, provided you require quick financial support without exorbitant interest rates. Amid the diverse set of mortgage loans, a LAP is probably the most rewarding option to rely on, based on the usable amount, speed of approval, and competitive interest rates.

Here are some of the reasons why loan against property (https://www.fullertonindia.com/loan-against-property.aspx) is a prudent choice for funding businesses or attending to emergencies:

  • Sizable valuation

LAPs allow you to get a decent line of credit as credible lenders offer a true assessment of the concerned establishment. While the business and personal loans have funding limitations, you can procure a sizable amount as LAP, amounting to almost 3.5cr for self-employed individuals.

  • Flexible Tenure

LAPs, if and when offered by credible lenders, allow you to be flexible with the tenure. Most importantly, you can use the same as a long-tenure mortgage loan provided you are willing to repay the same, slowly.

  • Supports a wide range of properties

If you have made up your mind regarding a LAP, you can use a wide range of establishments for procuring a decent line of credit. Be it a commercial or a residential establishment, loans against properties are compatible with diverse assets. 

  • Affordable

LAPs are extremely affordable considered the secured nature of the same. This means that the loan against property interest rate is often lower than a standard personal or business loan. Moreover, this attribute ensures that you can extend the tenure without having to worry about the accruing interest. 

These features qualify LAP as the best form of financial support, especially during emergencies. 

Must Read: 5 Types Of Mortgage Loans: Which One Is Best For You?

Rules To Follow While Taking A Loan Against Property

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If you are looking for a lump sum amount to finance your business, look no further than a loan against property. A property loan is a good idea to finance any requirements for a lump sum amount of money. The lender will consider your property as security and give a loan at an affordable interest rate. To get a loan against property, there are few rules you should abide by.

Rules to follow while taking a loan against property –

  1. Making repayments timely

Whenever borrowers do not make timely payment, lenders usually levy a penalty charge. This penalty charge increases the cost of borrowing for the borrower. In addition to that, many late EMI payments can also lead to a reduction in the credibility score. So, all borrowers should ensure that repayments are made in time and according to the interest rate decided. 

2. Read terms and conditions carefully.

There is a considerable amount of documentation required when availing a loan. It might all look not very interesting, but it makes sense to read all of it thoroughly to avoid any surprises in future.

It is also advisable to deal with a reliable lender and a credible agent not to experience any surprises regarding charges and repayment in future. 

3. Borrow based on your financial situation

As a rule, no Equated Monthly Instalments (EMI) must be more than 65% of your net income. Therefore, if you are considering applying for a more significant amount for a loan, your repayment capability as per your net income should match it.

These were a few rules borrowers should follow if they are looking to get a property loan. We hope you undertake responsible borrowing and repayment practices while availing a loan.

Must Read: All you Need to Know about Loan Against Property Overdraft Facility

 

Benefits of a Loan Against Property

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The loan against property is a type of loan that owners of the property can avail for a large sum of money and easy low-interest repayments over 15 years usually. The loan against property is not as scrutinising as some other loans. Thus the easy approval loan against property eligibility, large sum and a more extended period of the repayments makes this a very popular loan in the world of real estate.

1. Monthly Instalments

The monthly instalments are divided in such a way that you will be comfortable paying them for years and will be deducted directly from your income. It also means that you can claim this while you are filing your tax return. You end up saving a percentage of your money by not giving it to the government. A deduction of up to 2 lakhs can be claimed every year.

2. Interest Rate

It does not matter whether your interest rate is high or low on your loan against the property; this again can be claimed in the income tax returns. Thus you will be able to save even more money.

3. Usage

It does not matter how you choose to spend the money even though this is a secured loan. This flexibility means that the loan can be used for multiple things. Whether it be to finance your business, go on a vacation or use it to buy another asset.

4. Property Type

Whether you have a residential or commercial property, it does not matter as a Loan Against Property can be acquired for both of them.

Must Read: Should You Use a Loan Against Property for Home Improvement?

Quick Guide for Loan Against Property

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Having an asset or property can be advantageous in many ways. In an economic context, if you own a property, you can leverage the same to apply for a loan against property. The good news is that you will still be an owner of your property while availing the loan. Hence the loan against property is considered one of the most popular secured loan types in the market.

Benefits of Loan Against Property:

  • LAPs have lower interest rates than unsecured loans like personal loans.
  • The loan tenure can go upto 15 years in comparison with the limited tenure of personal loans.
  • Since the loan type is secured, the lenders have made the documentation process relatively flexible and simple for your benefit

Loan Against Property Eligibility:

As a borrower, you can leverage the loan against property EMI calculator to know the details of the loan. However, a lending institution would assess the following factors to qualify you for a LAP:

  • Must be of 21 years of age with the age limit upto 60 years for the salaried and 70 years for the self-employed
  • The value of the property
  • The credit score of the borrower
  • The income capabilities of the borrower. The lenders do expect minimum income sources to qualify for LAP

Conclusion:

You can check with your lender on the documents that need to be submitted to avail LAP which would be typically KYC, property, income proof documents. One needs to check with multiple lenders and decide on the best financial partner who can provide better benefits. 

Additional Read: How to calculate your Eligibility for a Loan Against Property?

Why Should You Opt For Loan Against Property?

Most financial experts suggest loan against property as a better alternative to a personal loan. Let’s have a look at some of the reasons why you should consider this financial tool when you require funds. 

Why should you opt for Loan Against Property?

As the name suggests, loan against property (LAP) is a secured loan wherein the financial institute or lender lends capital to the applicant and keeps their property as collateral till the repayment of the loan. After the applicant repays the loan, the property documents are returned to them. There are some significant LAP types – loan against industrial property, loan against commercial property and loan against residential property.

What are the benefits of a Loan Against Property?

  • More loan amount:

In the case of LAP, you can avail around 60-70% of your property’s market rate or value when you mortgage it. That means you’ll receive a substantial loan amount in contrast to what a personal loan offers. 

  • Low-interest rate:

A secured loan reduces the lender’s risk and hence is available at a lower rate of interest in contrast to an unsecured loan such as personal loans. The rate of interest in case of LAP is generally about 9-15%, which is relatively lower in comparison to the 15-22% window charged in case of personal loans. 

  • Easy to avail:

It is easier to get a LAP. Some of the standard loan against property documents required are proof of identification, proof of income, address proof, residence ownership proof, among others. The documentation, as well as the verification process, is easy, and  amount is disbursed quickly. 

Conclusion:

These were few benefits of LAP that make it an ideal choice among people who own some property. You can utilise your property while enjoying the advantages of LAP and paying convenient EMIs.

Must Read: How to Calculate Loan against Property EMIs Using Calculator?

A Quick Guide To Loan Against Property


Loan Against Property
A loan against property is a loan that you can take from a lending institution against the property. You should be the owner of the property. However, if you not the sole owner then all the other owners of the said property, should be co-signers on the loan application form. So, let’s quickly look at the defining features of the loan:

There are eligibility criteria to be met

Every lender has eligibility criteria to meet for availing the loan against property, and it is different for salaried individuals and self-employed individuals.  You have to meet the age requirement, the educational qualification (for salaried individuals) and income requirements. If you are an SME, you are required to submit your ITR for two years.

  • You have to submit the documents asked for

Salaried individuals are required to provide three months of salary slips and Form 16. Self-employed individuals require VAT and Form 32. You will also be required to provide proof of identity, address,

  • You do not need to declare the end-use of the loan

You can use the sanctioned loan amount to meet any money needs ranging from paying for a child’s education to starting a new business. Always use the EMI calculator to calculate the EMI and loan tenure.

  • Defining features

You can get up to 70% of the value of your property as the loan amount. The loan property interest rate is lower than other loans, and it is dependent on type of property, income, documents, and credit history. Most lenders require you to have a minimum score of 700.  

These are just some of the features of the loan, but you must ask the lender’s representative for details before applying for the loan.

Must Read: What are the Essentials of Loan Against Property?