Loan Against Property

Features and benefits of Loan Against Property

Lower Interest Rate:

Taking a ‘property loan’ – or more accurately a loan with property as security – is a cheaper alternative to other kinds of flexible end-use loans, like a personal loan. A Loan Property Loan is a secured loan which means that lenders can safeguard their lending risk with your property as collateral. On the other hand, personal loans are among the most expensive consumer loans to take as they are unsecured by any collateral. Generally, interest rates on a loan against property can range from 12-16% while interest rates on personal loans can range from 15-22%. Of course, each lender will fix the exact interest rate on your loan taking into account your credit profile, prevailing market rates and other internal policy regulations.

Larger loan amount:

The size of the loan depends on the value of the property. Naturally, the more valuable the property, the larger the loan amount that will be sanctioned. Typically, you can get a loan for up to 60 % of the market value of the property and this can translate into a sizeable amount of funds. The loan amount on this type of loan is far larger than the amount you would get for a personal loan. Moreover, this larger amount comes at a lower interest rate than a personal loan.

Longer repayment period:

Since it is a secured loan, lenders have a lower lending risk and are willing to grant a longer repayment schedule. The tenure for a loan against property can stretch up to 15 years while a personal loan has a tenure of only 1-5 years. A loan of this kind is advisable when you have a need for a substantial amount of funds which you can repay in the medium term.

Lower EMIs:

Because of the longer loan period, the monthly EMI is also smaller, meaning it is a lighter repayment burden over the entire tenure of the loan. You might be able to get a similar sized personal loan amount but since the tenure is much shorter, and the interest rates are higher, the EMIs will be much heavier.

Simpler documentation process:

Since most of the paperwork is done at the time of buying the property, the documentation required for a loan against property is simple. All it requires is a clean title deed with no encumbrances – i.e. there should be no existing loans, mortgages or legal complications. Any of these have a negative impact on ownership and will make it very difficult, if not impossible, to secure the loan.

Leverages an existing asset:

Like a gold loan, a loan against property allows you to leverage an asset that you already own. The property could be residential (house, apartment or plot of land), commercial or industrial.

End-use flexibility:

A Loan against Property gives you the freedom to spend the loan amount for any purpose you wish, much like a personal loan or a gold loan .You can use it to expand your business (buy new machinery etc.), consolidate high cost debts, fund a child’s education domestically or overseas, or even to buy another property. Because of the larger loan size and the longer tenure, a loan against property is ideal for a substantial medium to long-term expense

What is the eligibility for Loan Against Property?

Each lender has its own criteria for Property Loan eligibility. However, in general, they could include:

• Residency: Some lenders require that the applicant needs to be a resident of India. Other lenders do not have this restriction. Salaried NRIs can avail of a residential or commercial property loan subject to verification of property details.
  
• Minimum net income – the criteria could be different for salaried and self-employed individuals
  
• Minimum age: The minimum age too varies. Some lenders require the applicant to be at least 21 years of age, but more generally, the minimum age is 24 years at the time of sanction of loan. The maximum age too varies depending on the employment status – there could be different limits for salaried employees, government employee, or self-employed professionals. It typically ranges from 58 to 65 years and can even go up to 70 years with some lenders. The maximum age is the age of the applicant at the end of the loan repayment period.
  
• Employment status: Includes self-employed individuals, salaried employees with the government or a reputed private company, or professionals, like doctors, engineers, architects, dentists, chartered accountants, management consultants with a regular source of income. Some lenders might have restrictions on employment status, for instance, restricting a Loan Against Property only to self-employed individuals.
  
• Minimum loan amount: This again varies depending on the lender and which city the property is located.
  

We are doing loan against property under below mentioned parameters:

Loan amount - 10 lac to 1.5 cr. The followings are accepted as collateral:

• Urbanized lal dora
  
• Regularised colonies
  
• Delhi/NCR freehold properties
  
• Sub divided properties
  
• Commercial properties purchase & LAP
  
• Residential property
• Mixed use properties
  
• Joda properties
  

How to apply for an Loan Against Property?

You can apply online by filling in the application form and turning in all the required documents. or You can apply in person by visiting the lender’s branch with all the needed documents and filling out the application form for the same.