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