Property Loan

Key Aspects to Consider Before Taking a Loan Against Property

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A loan against property can provide a large sum against a pledged immovable property (residential or commercial) to fund various purposes. Whether it is funding business expansion, higher education, weddings, facing medical emergencies, or other business-related or personal purposes, a property can help individuals get funds without losing ownership. You can apply for a lap loan: 

Key Aspects to Consider While Applying for a Loan Against Property

The following are the key things one should consider while planning to apply for a loan against property (LAP): 

  • Evaluate the Property Value

The borrower should evaluate the property value they want to collateralize. It helps to know the funds the lender can provide against a property. Renowned lending institutions can offer loan-to-value (LTV) of up to 70%. 

  • Documents Required

Well-established lending institutions and NBFCs (non-banking financial companies) have kept the loan against property document requirements minimal. The common documents are the applicant’s ID proof, address proof, age proof – A certificate from the Government authority/PAN Card /Passport, salary slips, Income Tax Return (ITR) acknowledgment, and title deeds of the pledged property.

  • Repayment Tenure 

A loan against property is a long-term loan. Loan tenure is flexible enough in terms of repayment tenure. Customers can choose a tenure of up to 15 years. Select a suitable loan tenure so the loan can be repaid easily.

  • Processing Fee 

One of the fees included in the overall loan against property cost is processing fees. Consider the processing fee and any other charges levied by the lender to know the real cost of availing of the loan.

So, carry important loan against property documents and apply online with reputed lending institutions. 

Must Read: Tips to Stay on Top of your finances with Ongoing personal loans

Top Benefits of Taking a Secured Property Loan

When the need arises to borrow money, aspiring borrowers must pick from secured or unsecured loans. Both loan types give a remarkable degree of financial freedom to the borrowers. However, a Property Loan is an intelligent choice to avail of the required funds. Here are a few advantages of taking a Loan Against Property.

Obtain a Bigger Loan Sanction: Lending institutions lend a LAP against a property pledged as collateral. Therefore, the loan sanction depends on the collateral property’s value. Most NBFCs sanction up to 70% of the property’s current value, allowing a bigger loan sanction per the requirement.

Enjoy a Reasonable Interest Rate: Since it is a secured loan, the Property Loan interest rate is more reasonable than unsecured loans. If the borrower fails to repay the loan, the loan provider has the right to seize the collateral and get its money back. So, the lower risk encourages lending companies to offer reasonable interest rates.

Repay Over a Longer Term: Extended loan tenure is the key benefit of taking a Property Loan. Reaching up to 15 years, the longer loan term makes EMIs more affordable on a budget. Borrowers can use an EMI calculator to estimate the EMIs and select a suitable loan term according to their repayment capacity.

Loan Against Property is an excellent funding option with flexible repayment facilities and instant access to the required finance. Check the lending company’s Property Loan interest rate and eligibility criteria to enjoy the perks it brings. However, be sure to pay the EMIs on time to keep your collateral secured and get the most out of it.

Also Read: How Interest rate and repayment tenure are key deciding factors for Property Loan?

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?

Factors Affecting Your Eligibility for a Loan Against Property

A loan against property is a secured loan that allows you to use the funds locked in your assets. You can pledge your property as a security and obtain a loan against it at lower interest rates. However, if you are looking for a loan against property, several factors may affect your eligibility. Let’s take a look at them.

  • Loan Amount: The loan amount you want to borrow directly affects your eligibility for a loan against land or property. The higher the loan amount you borrow, the stricter the terms and conditions would be.
  • Credit Score: Your credit score is one of the most crucial factors affecting your loan eligibility. You must have a credit score of at least 700 to avail a loan against property. Since your credit score signifies your repayment history and credit behaviour, lenders use it as a parameter to determine your loan eligibility.
  • Property’s Value: The lender evaluates the value of the property you want to secure against the loan. Your loan against property interest rate, eligibility, and loan amount largely depends on your property’s value.
  • Age: The borrower’s age matters a lot while applying for a loan against property. Lenders prefer borrowers in their prime earning years. If you have just started your career or are about to retire, it may affect your loan eligibility. That is why most lenders have a minimum and maximum age limit that applicants must follow.

Applying for a loan against land or property has become quick, simple, and streamlined through online methods. However, check your lender’s eligibility conditions and fulfil their requirements before filling your application form.

Must Read: Step By Step Guide to Know How Loan Against Property is Processed!

5 Useful Tips to Get the Best Mortgage Deal

Are you looking forward to funding your home purchase with a loan? You will find hundreds of lenders offering mortgage loans out there. These days, NBFCs make these loans readily available to borrowers. However, here are five valuable tips to get the best mortgage deal:

  1. Maintain a High Credit Score

Lenders check your credit score before approving your mortgage loan. They decide your loan amount and interest rates based on your credit score. Therefore, pay your EMIs and credit card bills consistently, diversify your credit portfolio, and reduce your DTI ratio and credit utilisation rate to maintain a high credit rating.

  1. Save More for a Bigger Down Payment 

You need to make a down payment while applying for a loan. The higher the down payment you make, the easier your loan approval will be and lower your interest rate. So, save more for a bigger down payment and get the best mortgage deal.

  1. Pay Off Your Existing Loans

Lenders look at your current financial obligations before approving your loan application. Ideally, your debt-to-income ratio should not be more than 30-40%. Therefore, pay off your existing loans before applying for a new loan to get the best mortgage deal.

  1. Select the Right Repayment Term

Mortgage loans often come with flexible repayment terms that you can choose according to your repayment capacity. Use a mortgage loan calculator to calculate your EMIs so that you can repay them on time. Assurance of timely payment can help you grab the best deal.

  1. Compare Lenders

Shop around and find the lender offering the best mortgage deal according to your requirements.

Use these tips to find the best deal on your mortgage loan and become the proud owner of your dream home without stressing your finances.

Must Read: Step By Step Guide to Know How Loan Against Property is Processed!

5 Factors That Affect Loan Against Property Eligibility

A loan against property is an excellent option when you need cash at very low-interest rates. LAP loans are secured, and hence you will have to provide a property as collateral. The financial institution will offer you quick loans to ease out the emergency. 

Will I Be Eligible for a LAP Loan If I Own Property?

No! Your eligibility for a property loan depends on certain factors, and knowing them will help you understand and make amends before availing of the loan.

  1. Current Employment Status 

Your present employment status determines your financial stability to repay the loan. The lender will consider your cumulative income from all sources to assess your financial situation. 

  1. Credit Score

Lenders sanction the loan only after they ascertain your credibility. There is no better measure of credibility than one’s credit score. If you do not meet the lender’s criterion for credit score, then your application is most likely to be rejected. Credit scores ascertain that you are a risk-free borrower. A credit score above 750 can help you get the loan sooner and get a lesser property loan interest rate.

  1. Insurance of the Property 

If the property is secured in terms of an insurance policy, the lender will consider your property secured and trust you. 

  1. IT Returns

You will be asked to furnish IT return documents by most lenders. If a Chartered accountant ascertains the last three to four years, the tax files will prove to the lender that you have a steady cash flow.

  1. Loan Tenure

Most lenders reject shorter loan tenure after ascertaining your repayment capability based on your average monthly income. Calculate your EMI using an EMI calculator to apply for an affordable EMI where you can easily make timely payments. Choose a comfortable tenure that will assure your lender that you will not default on the loan instalments.

LAP loans offer the cheapest interest rates starting from 9%*. You can easily avail of a maximum loan amount of up to 5 crores (up to 70% of your property’s market value) by pledging a property of the corresponding high-value property.

Must Read: NEVER MAKE THESE MISTAKES WHILE OPTING FOR PROPERTY LOAN

Is it a Good Idea to opt for a Loan Against Property (LAP)?

Loans are mostly availed when we are confronted by emergencies or require immediate financial assistance. While several kinds of loans are available at our disposal, it is essential to consider the differentiating factors. Among such options are the loans that one can avail of against their property. Although there are particular concerns, financial experts state that it is the most secure form of loan and has a lower interest rate than other loans. 

Taking a loan against property allows you to use the money at your discretion. Much like a personal loan, there is no designated purpose for using the loan amount. However, a property loan interest rate is lower than its counterparts. You can use the loan to expand your business, medical treatments, or meet any other personal or business goals. 

Additionally, the loan provides substantial benefits like lower interest rates, an extended repayment tenure, and immediate availability of funds. However, the most significant benefit provided by a loan against property is the availability of using the collateral property continuously during the repayment tenure of the loan. Moreover, you can also avail of tax benefits while repaying the loan, and there is rarely any charges for foreclosing the loan.

The eligibility of the loan depends on the age, income and occupation of the applicant. A property loan interest rate is fixed by assessing and analysing the property’s age and location. 

Must Read: Major Factors You Should Consider While Taking Loan Against Property

What Are the Conditions to Fulfil While Availing Loan Against Property?

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A loan against property is the loan availed by pledging an immovable property as collateral with a lender. The property can be residential or commercial. One can easily avail of loans up to 3 crores using the loan against property.

Conditions To Fulfil While Availing a Property Loan

You can avail loan against a property if you meet some eligibility terms, such as:

  1. You can pledge properties that are residential in nature. It is not a problem if your property Is occupied by tenants and is rental in nature.
  2. You can also avail loan against property using a land property type
  3. Commercial properties can be used as collateral during loan against property application provided your documents are clear,
  4. You need to have a stable income and be an employee of an established MNC, private sector or public sector.
  5. You need to have a high CIBIL score of up to 750 or above.
  6. Your age needs to be between 21 to 60
  7. You need to be a resident citizen of India.
  8. If you are self-employed, you need to show a steady source of profits for two years.

You can use a free online loan against property LTV calculator to understand the maximum loan against property eligibility based on the nature and value of your property.

To apply for a loan against a property, you can install your lender’s app and follow three to four steps. The loan will be credited in lesser time than usual due to the digital processing of documentation.

Additional Read: How to Avail a Loan Against Property Without Income Proof?

How to Avail a Loan Against Property Without Income Proof?

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A loan against property (LAP) is taken against a residential or commercial property mortgage or plot. Before your financial institution sanctions, they evaluate and determine its monetary value. If the title deeds are in place and free of any legal issues, you get the loan at a certain percentage of the property’s market value at the time, typically between 40-60%. 

Since a LAP is a secured loan wherein you pledge your property, your loan against property interest rates is relatively lower than the interest rates for personal loans. You also get much longer tenures with collateral in place. 

Availing a LAP Without Income Proof

Whether or not your loan has collateral on the line or is collateral-free, income proof is an integral part of any loan availing process. The following are a few tips on how to work through this:

  • Ask your lender if there is any other proof or document that you can provide to prove your repayment capacity.
  • Adding a co-applicant on the loan, someone with income proof, a good credit score, and steady earnings can sway the decision in your favour.
  • Maintaining a good credit score can be your saving grace. It assures your lender that you have been consistent with debt repayment in the past. 

Fullerton India offers LAP loans that can help you fund your financial needs. With competitive interest rates, long tenures, and flexible repayment schedules, you quickly become financially secure and stable while repaying the loan at your leisure. Go for it.

Additional Read: Crucial Things To Know About a Loan Against Property

Crucial Things To Know About a Loan Against Property

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A LAP loan is a secured loan that you avail of against the value of your property. It serves multiple purposes which means that you can use the loan amount to cover the cost of a medical emergency, wedding, higher education, international travel, car repair, home renovation, etc. It enables you to secure up to 80% of the property’s value as a loan. Before applying for a LAP loan, here are the crucial things to know.

Crucial Things To Know About a Loan Against Property:

  • Interest rate

Since it is secured, the loan against the property interest rate is significantly low. However, it would be wise to shop around and find a lender who offers the lowest interest rate. Also, if you wish to secure a lower interest rate, you need to convince your lender that you have a stable income and have maintained a healthy credit score. 

  • Eligibility criteria 

Before applying for a loan, make sure that you meet your lender’s eligibility criteria. Usually, you have to be at least 21 years old and a salaried employee of a company to qualify for a loan. Also, you must show a minimum based on your lender’s policy. 

  • Loan amount

Although you can get up to 80% of the property’s value as a loan, that does not mean that you should opt for a higher loan amount as soon as you see an opportunity. Assess your needs and choose a loan amount that you can afford to repay without any default. 

  • Choose the right loan tenure 

Your loan tenure directly impacts your EMIs and your affordability. Use an online home loan calculator to determine a loan tenure based on the EMI you can afford to pay every month.

Must Read: 5 Rules to Keep in Mind while taking a property Loan

Four Reasons Why to Take a Property Loan

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Taking a loan against property is an excellent choice for individuals moving into a new home. It provides a host of benefits, including a higher loan amount, longer tenure, low-interest rates, and relatively quick disbursement. Here are a few things you must know before taking a property loan.

Four Reasons Why to Take a Property Loan 

  • Repayment 

Since LAPs have a higher tenure and a considerably low-interest rate, the repayment schedule is more or less flexible. You may pay the loan off early to prevent giving a lot of money in floating interest rates, but even otherwise, you can repay the loan between one to ten years. 

  • Application 

Try to research the eligibility criteria and documents required in reference to the NBFC you are borrowing from. The criteria and loan against property documents required may vary from company to company, but make sure that you have all the right documents and proofs in place before applying for the loan. 

  • Repayment capacity 

This point is somewhat related to the application process, but a crucial step of getting a loan against a property is that the lender must be convinced that you will be able to pay back the loan. For this, the applicant must be a salaried individual or self-employed. The NBFC may need documents such as income statements, repayment history, CIBIL score, ongoing loans, etc. 

  • Ownership 

Even though the lender will ask you to submit the property documents at the time of loan approval, you remain the property owner. But, you must make a list of all the documents that you are submitting. Also ensure you have photocopies of the documents. When your loan is repaid, ensure the lending company returns all the documents to you. 

A property loan may help finance your kids’ education, a wedding, or medical emergencies if needed. 

Additional Read: Factors Affecting Loan Against Property Eligibility (Best of 8)

3 Reasons to Use Loan Against Property for Medical Treatment

A secured loan option, Loan Against Property, can be availed by all individuals who have a property they can keep as collateral. Whether it is a residential or a commercial property, one can pledge it as security while not losing your right over the property. In case the borrower struggles to pay off the loan and defaults, the lender can use the property to repay the loan.

You can use the property mortgage loan fund for any emergency purpose like a wedding, education, vacation or even a medical emergency.

Why opt for a property mortgage loan for medical treatment?

  1. Quick Funds: During a medical emergency, one requires an instant loan to take care of all the expenses. In such a case, an option that offers fast approval and quick loan disbursal is your best option.
  2. Affordable Loan terms: In times of crisis, everyone looks for an affordable financing option that might not become a burden later. Loan Against property provides a loan amount of up to 80% of your property price at a flexible property loan interest rate. It makes the loan a more affordable and convenient borrowing option.
  3. Ease of Usage: With no restriction on the usage, a property mortgage loan takes care of all your expenses from medicine, treatment, room, surgery etc. If there are any unexpected circumstances, then the Loan Against Property takes care of it all.

Conclusion

A loan against property is offered by various lenders and based on your understanding and requirement; you can shortlist the lender providing the best property loan interest rate. You might also have to submit some documents for KYC verification, i.e. proof of age and residential address, documents of your overall income, the ownership documents of your property.

Must Read: Follow 7 Steps To Get A Mortgage Loan Successfully

Ten Reasons Why You Should Take A Loan Against Property to Pay Off Loans

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There could be instances when one needs a large amount urgently. Funds could be needed to deal with business losses or for business expansion or an impending wedding or for foreign education. If one has property available, rather than selling the property to arrange for the funds, one can take a property loan for the convenience. 

Here are ten reasons why a property loan or a loan against property is useful:

  • A high LTV: 

A loan against property is generally sanctioned up to 90% of the property value which allows for a higher loan to be obtained. 

  • Lower rate of interests:

 The interest rate of a loan against property is lower than a personal or unsecured loan. Such a loan against EMI calculator will easily show the benefit of the same. 

  • Secured Loan:

Since the loan is secured against property, financial institutions have easier norms. 

  • Possibility for higher tenure: 

The security of the property allows financial institutions to provide a longer tenure for repayment thus easing immediate financial pressure on the borrower. 

  • Prepayment is allowed: 

Loan against property allows for pre-payment and thus the borrower can prepay as and when the financial situation strengthens. 

  • Single loan instead of multiple loans: 

Since a loan against the property can be obtained for a higher amount, it can be used as a mode to repay other loans. This will result in a single EMI instead of multiple EMI’s. 

  • Easy approval as opposed to personal loans: 

Property loans are generally easily approved as compared to personal loans due to the security of the property. 

  • Faster disbursement: 

The easy approval results in faster disbursement allowing the user to make use of such an amount and take advantage. 

  • Top-up facilities can be availed: 

Users can choose to borrow until a certain percentage of the property and keep the option of top-up open for the remaining portion. 

  • Tax benefits in certain cases:

Interest and charges for such loans can be claimed in Income Tax if used for business purposes and can also be claimed against House Property if loan obtained for such purpose. 

Selling a property could take time. It may also be a convoluted process. Therefore it makes sense to acquire a property loan and arrange funds quickly.

Additional Read: Here’s how you can avail tax benefit on loan against property

Important Facts To Know About Property Loans

The biggest challenge for a borrower would be to choose a finance option that does not hurt his/her repayment phase and has lower interest rates. If you have an asset that you can leverage to avail loans from established lenders, you can have a considerable advantage over your finances. Here’s where LAP comes handy.

LAP – Important facts

In Loan against property you can pledge your property to the bank/NBFC to avail of loans. Here are some facts about LAP:

  • Ownership:

Despite pledging your property to the lender, you are still entitled to the ownership of your asset. You can sell the property to settle the loans and also could lease out your building during the tenure. In some cases, banks/NBFCs also provide mortgage loans to those properties which are under home loans. Such an instance is possible if the market value of your property increases.

  • Floating interest rates: 

Compared to home loans, where the interest rates are fixed, LAPs have floating interest rates, which can depend on the lender. Hence you need to check with your lending institution on this during application. 

  • Associated charges:

There will be a small percentage of the loan amount debited as the processing charges for the loan. Most of the lenders do not levy penalty charges for pre-closure of the loans. 

Conclusion:

The documentation and the processing time for such loans are usually hassle-free. You can use a mortgage loan EMI calculator to compare the lenders and choose the best financial partner for yourself.

Must Read: Important Factors That Affect Your Property Loan Eligibility

A Comprehensive Overview Of Essentials of Loan Against Property

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In this day and age, a host of loans are provided by banks so that we can use the cash for various purposes. It can be a vehicle, a house, or a loan for any business venture etc. A relatively popular loan is the Loan Against Property which is essentially a mortgage. This type of loan is popular amongst borrowers as it allows you a large sum of money for any need or challenge that you might incur. Another attractive part of this loan is that it has easy documentation/loan against property eligibility and very flexible repayments. Add to that speedy approvals, and one can surely guess why many apply for a loan against property.

In the loan, the property is put up as a collateral or security. The state defines a loan against property as only a transfer of interest and not the ownership. It means that the borrower remains the owner of the property and the transfer of ownership will happen if the borrower defaults on the loan repayments.

The loan against property eligibility includes the proof of residence, income statement, latest bank statement. If you are an employee, you need the last six months’ salary slips. If you are a business owner, you might need to show at least three years of income before your loan is approved.

The key benefits of having a loan against property:

  1. Lower interest rates
  2. Good while availing more massive amounts
  3. Low EMI due to longer tenure
  4. The Flexibility of how you use your loan

Must Read: Advantages of Loan Against Property to Raise Funds

Reasons Behind Rejection Of Loan Against Property Application

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Applying for a loan against property is the easiest way to get funds during financial emergencies. It is easy to meet the eligibility criteria with a little preparation. But it entirely depends on the lender to approve or reject your application. 

But sometimes it happens that a mistake cause rejection of your loan against property application. Here’s a list of 5 reasons that might lead to rejection of your loan against property application-

  1. Age Of The Property

It is one of the essential factors for the approval of your loan. The current condition of the property determines the loan tenure. If your property is new, then the loan tenure will be longer. The property’s value also determines eligibility. You can quickly check the eligibility using a loan against property calculator.

  1. Approval By Government

It is necessary to have all the documents and the government’s approval on the property. If you have lost some approval documents, then you can apply for them again. 

  1. Deviations From The Approved Property

There should not be any discrepancies or violations from the approved property. The lender might reject your application if there is even the slightest deviation.

  1. Disputes On The Property

If there are any co-owners of the property, then the application form must be signed by them all. There should not be any dispute regarding the property.

  1. Income Tax Returns

It is necessary to have filed the income tax returns for three years if you are self-employed. 

Conclusion:

Make sure to meet the minimum credit score and have all the documents in-hand before applying for a loan against property. With some research and planning, you can quickly get your loan approved.

Additional Read: Factors That Affect Tenure of Loan Against Property

Are There Any Benefits Of Taking A Loan Against Property?

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A property is a financial asset. But, for most people, it is also an emotional investment. However, many people are hesitant of using this asset to get a loan.

But, if you need cash, then this is one option you must explore. Here, we have listed some of the major benefits of taking a loan against property to help you make an informed choice.

  1. You get a high loan amount – Most properties are high-value and you can get up to 70% of the value as the loan amount. It means you can meet heavy expenditures like paying college fees, wedding expense or financing a new business.
  2. You do not lose ownership of the property – One of the biggest advantages of this loan is that you can continue to enjoy the property for self-use. Additionally, you remain the owner of the property. Do remember that if you miss your EMIs regularly and the lender calculates your inability to repay the loan, they can sell the property to recover dues.
  3. The interest rate is lower when compared to other loans – Since you are pledging an asset to the lending institution, the interest rate is lower when compared to personal loans. The loan against property interest rate starts as low as 9% and goes up to 24%. But, the actual interest rates depend on a lot of factors as listed on the lender’s website.  

You are putting up a much-valued asset as collateral. So, you need to do your due diligence about the lender apart from researching the interest rate to knowing the loan against property documents required to make the right decision.

Additional Read: How to Ensure Maximum Savings on Loan against Property?

Top Four Reasons To Go For A Loan Against Property

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A property is a valued investment, not only for its net worth, but also for the sentiments attached. Many people are, naturally, hesitant to put up a property as collateral for a loan. The article shares the top four reasons why such a property loan, as a loan against property is sometimes called, is an excellent idea.

  1. You are the owner of the property – You can use the property for residential or commercial use.  The only restrictions are that the title deeds are submitted to the lender and you do not have the authority to sell the property without loan repayment.
  2. Use the money to meet different needs – It is the perfect way to monetize an asset and get access to funds to meet various needs. Some of the needs you can cover are shopping, travel, wedding, education, medical, business and more. You should use the loan amount for legitimate activities.

  3. Affordable rate of interest – The loan against property interest rate is usually lower than the interest rate of other loans. The interest rate determines your monthly installment. You should use an EMI calculator to calculate the EMI and take an informed decision.

  4. Flexible tenures – Most lenders offer tenures going up to 30 years, making it easier for you to repay the loan. One word of caution, nonpayment of an EMI can lead to penalty, and repeated nonpayment can lead to loss of property. 

The final decision to take a loan against property should be based on requirements and after comparing the interest rates, trustworthiness and reputation of the lending institution.

Additional Read: Loan against property vs gold loan: which one should you take?

Advantages Of Taking A Loan Against Property To Consolidate Your Debt


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Before the Corona Virus hit the globe, the GDP of the Indian economy as a whole was projected to grow. Most people were sure of the strength of their careers and their ability to hold jobs, get promotions, and increase their incomes. It was but natural they took out different loans to meet the standards of a modern lifestyle.

Unsurprisingly, many salaried, as well as self-employed professionals, took loans to buy a house, car, bike, holiday plan, dresses, mobiles, and more. Now they are burdened with multiple loans, and for those who have clear titles of a commercial or residential property, taking a loan against property for debt consolidation is a great solution. Here is advantages of it go through it.

Advantages

  1. You have one EMI – Since all your loans are consolidated in one loan, you have to keep track of only one EMI. It reduces your chances of missing an EMI and thus increasing your burden.

  2. Interest rate is lower – Unlike a personal loan or education loan, the interest rate on LAP is lower. A lower interest rate means a reduced EMI, which further decreases your debt burden.

  3. No restriction on use – There is no restriction on the end usage of the loan and you can take it to meet any requirement for your day to day life or business need.

  4. Renegotiate the terms and conditions – Take the help of a financial expert to renegotiate the terms and conditions of the loan. They might be able to help you get a longer tenure with less stringent clauses.

These are some of the advantages of using your asset to keep afloat during these tough times.

Reference Read: Tips to Get a loan against property without an income proof

Comparison Between Loan Against Property And Unsecured Business Loan

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With the different types of loans, the availability of funds has increased over the past few years. Due to an increase in funding by lenders, businesses are growing without any obstruction. Loans can be divided into two different types unsecured and secured loans.

In loan against property, one can avail benefits of credit by putting any property as a security of the loan. Loan against property loans is less as compared to that of unsecured loans.

LAP

After availing a Loan Against Property, one receives a certain percentage of asset value which is known as loan to value. If a credit is issued without any collateral, then this type of loan is known as an unsecured loan. Before applying for any business loan or taking a credit facility, one should keep certain factors in mind. Enlisted below are some considerations:

  1. Interest rate: Rate of interest varies from the type of loan you want to avail. The interest rate is determined based on the credit score of the borrower. Unsecured business loans generally have a high interest.
  2. Period of Loan: If longer tenure is chosen, then the monthly EMI’s are less. Loan against property offers a more extended period as compared to that of business loans.
  1. Eligibility: 

To avail the benefits of any credit facility, you must meet the ability of the loan. For unsecured loan your credit rating, salary plays a crucial role in determining the eligibility.

Conclusion:

Before availing one of these loans, one must always compare different lenders. It is advised to know your requirement before availing any loan.

Additional Read: Essentials of loan against property that you should check

Steps To Follow While Applying For A Property Loan

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Property loan is one of the oldest and most availed loans in India. The process is approved upon mortgaging the property. Usually, banks follow a process and provide credit according to the property valuation (50%-70% of the property value). A valuable property can help you avail substantial credit amount when you need it in the form of Loan Against Property. Lenders usually do not demand you to provide details of usage of the loan amount.

Top 7 Features and benefits of a loan against property are listed as follows:

  1. A secured loan allows quick processing of a loan
  2. The loan amount can be used without any specified end-use from the lender
  3. Rate of interest is significantly low
  4. Long tenures are allowed
  5. Ability to apply for top-up loans
  6. Hassle-free application process
  7. Flexibility in eligibility criteria of the borrower

Conclusion:

Loan against property is secured loans that take your property as collateral. It is often used to generate funds and pay off dues and medical bills. Being a secured loan, you need not pay high-interest rates. You can check your eligibility for a loan against property online. After getting the amount, you can use it to pay off your dues, make arrangements for a wedding, or buy a luxury item.

Must Read: All You Need To Know About Loan Against Property