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​Essentials of Loan against Property You Must Not Avoid

You all must know COVID has impacted the maximum population physically and mentally, and financially. The financial crunch faced by many was tough to manage without any external support. Many who had the will, opted for a loan from their family and companies to meet their daily needs? And those with high self-esteem who wanted to avoid any mishaps in family opted for other routes once the lockdown was lifted. One such route that many opted for from banks – PSU (public sector units) like PNB loan against property, State Bank of India, Bank of India, Bank of Baroda, and Private banks like Axis Bank, HDFC Bank, ICICI Bank, IndusInd Bank etc. was a loan against property. 

As a loan against property is a secured loan option, many of the lenders provided the loan against property without income proof to them. For availing loan against property, there is no specific property type on which this loan is provided. You can avail of this loan on your commercial or residential property. Also, you can make the most out of this loan by applying for it via the online route, i.e., from the comfort of your home, with just a single click of a button. To avail of the loan against property approval, all you must do is provide all the required documents that lenders want. Read on to know the benefits of loan against property – 

Get the loan against property at a lower interest rate – 

As it is a secured loan, lenders’ credit risk is negligible in this case. Thus, a loan against property’s rate of interest is lower than other credit options. This specific factor can be looked upon as a benefit of a loan against property. Moreover, as you get this loan at a lower rate of interest, it results in lower equated monthly instalments and thus is pocket friendly in nature. 

Continued property possession – 

Even though you have mortgaged your own property to avail of the loan to the bank, the possession stays with you. You can continue using your property even when making your loan EMI repayment. Non-transfer of the possession or ownership is the best part of such loans. You can get this loan straight by mortgaging distinct property kinds for loan against property like rented out, self-occupied etc. You can also mortgage your residential or commercial property. 

Apply online for: Loan against property without income proof

Partial fund disbursement – 

A loan against property provides you with the benefit of partial loan disbursement, where you receive a portion of your loan proceeds and hold the rest of the amount for further stages. This kind of facility is specifically advantageous if you have availed of a loan for construction purposes. Additionally, you can get disbursement of the amount sanctioned in multiple tranches based on your requirement by repaying the interest just on the amount disbursed. 

Long repayment loan tenure – 

Once you are done with your online loan against property application and get the loan post-sanction, an extended tenure is provided, unlike unsecured credit options, where you avail of shorter tenures. Thus, a loan against property is an amazing or lucrative route as it permits a lower rate of interest along with higher repayment loan tenures. Additionally, a higher tenure disseminates the amount to be repaid in smaller EMIs or equated monthly instalments. 

Higher loan proceeds – 

You can well manage your big-ticket expenditures with the assistance of a loan against property for your business or individual requirements. The higher loan proceeds are available because of their secured nature. A proceed of nearly up to 75 per cent of your property value may be availed through a loan against property. Additionally, as it is a security-based loan, it offers higher repayment tenures as well as a lower rate of interest. 

What are the essentials of a loan against property that you cannot avoid at any cost?

Whenever you place an online loan against property application, you must provide all the necessary documents required for this loan. Besides this, there are a few important considerations that you must note – 

Property valuation

Distinct property types for loan against property can be mortgaged with lenders to get this option. Before providing you with the procedure that you require, lenders tend to assess your property’s value depending on the current prevalent market rates. The lender, once assessed your property in totality, will sanction you the loan proceed of up to 75 per cent of your property value after you submit the property papers. Note that the property value may vary from one lender to another. 

Interest rate 

While the loan against property rates is lesser than the rate of a personal loan, it is better to conduct market research on the ongoing loan against property rates. Additionally, distinct lenders levy distinct rates, so avoid rushing into this process of getting a quick loan. Do your own research and after research, ensure to also negotiate with the lender for the best rate. 

Repayment tenure

Lenders offer higher repayment tenure for your loan against property. The repayment tenure generally differs from one lender to another. Few lenders provide loan against property for as high as 20 years. Being a loan borrower, you must maintain the right balance between the EMIs and repayment tenure. For this, you may opt for using the online loan against the property EMI calculator. Such online calculators provide you instant results in inputting the details as per your preference. The details and findings from such online calculators can form the basis for negotiating with the lender for the best rate, loan amount and tenure as per your cash flow and repayment potential. Also, ensure never to overborrow. Take just the loan amount that you require because the provided loan proceeds come with an interest component that you must repay over the loan tenure. Opting for a higher loan proceed unnecessarily increases your overall loan against property interest constituent. 

Loan processing charges 

Lenders levy processing charges as per their conditions. For instance, this charge may range anywhere between 0.5 per cent and 2 per cent of the approved loan proceed or the maximum or minimum fixed amount. Thus, do not zero on a loan against property solely on the offered interest rate. Also, factor in the processing charges that you will have to meet from your own pocket.

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