For a lending institution, a loan against property is one of the most secured loans. It has a lower interest rate compared to other options. Financial problems of medical expenses, education, business expansion, or a wedding can strike anytime. You can tide over such urgent fund requirements if you own a property.
Below are the Aspects of a Loan Against Property:
Since the loan amount that can be used against property is high, the borrower must fulfill the required income criteria to repay the entire loan. The borrower can repay it for 12 months up to 20 years, varying from one lending institution to another.
A property loan is provided against collateral that can be immovable property, such as constructed residential/commercial property. Before deciding your eligibility for a loan amount, your lending institution will assess your property. The loan amount depends on the current market value. Lending institutions mostly provide up to 50-60 percent of the market value of a property as a loan.
Ownership of Property
Your loan will be approved by the lending institution after it is convinced that your title deed to the said property is clear.
Any property loan comes with longer repayment tenure compared to a personal loan. The EMIs, you can pay for a more extended period, and the rate of interest is much lower. A longer tenure means lower EMIs, which in turn reduces the burden of monthly repayment.
Based on your income statements, ongoing loans, and repayment history, the lending institution will evaluate your repayment capacity.
We all know medical expenses can come without warning and be very costly. If you are facing a medical expense and don’t have enough savings to pay, you may want to consider getting a loan against your property.
A property loan can provide the funds you need quickly. With this capital, you can cover your medical expenses.
If you have a planned medical expense that is not an emergency, it is better to go with a property loan rather than any other loan available in the market.
Property loan interest ranges between 8.00% to 25% pa. You can avail of loans of up to Rs 25 crore for a tenure of up to 20 years.
Below are the Points when Applying for a Loan Against a Property
Property loans are secured loans. Based on the applicant’s age, income, and other eligibility criteria, the lending institution may offer a longer repayment tenure which can be up to 20 years.
Since lenders have the security of physical assets, a bigger loan amount can be offered depending on the property value. Before this, the lender will evaluate the property value, and also applicant’s age, income, past payment history, and credit rating will be taken into account before the loan is approved.
Loan against property interest rates is lowered compared to unsecured loans—the more secure the loan, the lower the interest rate and vice versa.
Unlike personal loans, which can be processed within days, a loan against property takes time because lenders need to check the property and its documents properly. The lender must evaluate the property’s worth per the current market value; hence, it will take time.
Eligibility to Get a Loan Against Property
- A person must be salaried or self-employed
- Property should be in their name to keep it as a guarantee
- The minimum net income of a person should be Rs 25,000 per month
- The minimum age should be 21 years
The eligibility criteria can change from one lending institution to another; Lending institutions also provide good property loan interest to the borrower since the property is kept as a security.
A Loan Against Property is a loan that is given against a property. At the time of any medical emergency in the family, you can go with the option of getting a loan against the property. You can get substantial funds in a short time that will help you overcome your medical emergency.