Features & benefits of loan against property

With the passage of time your property not only grows in age but it also grows economically. This has the potential to bring you out of any financial crisis without taking any favor from friends or relatives. Loan against property from various lenders in the market, helps you to unlock the potential value of your home or property in a very short notice to get loan for your immediate purpose.

The reasons can be personal or commercial. If you own a particular property, then you can get a loan of almost 50-60% of the property value by mortgaging it for certain period of time. Easy availability, lower interest & maximum repayment tenure makes it one of the most favorable collateral.

Loan against property helps the individuals in need, to have a financial support without selling your property.

Some of the features of mortgage loan are as follows:

1. You can mortgage fully constructed, freehold residential & commercial properties to get the loan against property.
2. The borrower can get the loan for business & personal needs, marriage, treatment, education, etc.
3. You can also get the loan to transfer the outstanding loan from one institute to another.
4. The repayment tenure can be stretched up to 15years.
5. You get flexible repayment option in form of EMI to pay off your loan without much hassle.
6. The interest rates are much lower compared to other personal & commercial loans.
7. Integrated branch network & services make it easier for the borrower to get the loan easily.

The above mentioned features proves that loan against property is one of the best options to get a lump sum amount for big budgeted financial need.

Mohit was looking for some financial help to open a shop in one of the biggest mall of the city, but nobody was ready to invest in his startup business. So he decided to move ahead with his plans by approaching the RBI authorized lender with whom he already maintained an account.

The professional advisors suggested him to go for loan against property, because he would get a long term to pay back the loan at a competitive rate of interest. So he decided to mortgage the plot of land which he owned to get the amount, which he needs to invest in the shop he wished to purchase.

The bunch of benefits he enjoyed is as follows:

1. The loan was easily approved because the collateral was dispute free & owned by Mohit himself.
2. He took the loan from the same institute in which he maintained an account, so his loan was processed quickly and received almost 60% of the present value of the property.
3.  He enjoyed pocket friendly EMIs because of the lower interest rates & long tenure.
4. Owing to the flexibility, he could increase the EMI amount with the improvement of his financial affordability.

Now, Mohit is running a successful shop in the mall of his dreams. He is paying his EMIs regularly and is also saving a lump sum amount to pay off the loan against property quickly and free his property from the debt clutches.

You can also make use of mortgage loan when you need lump sum amount, but only condition is that you should be well prepared financially to pay off the debt & free your property.

Bootstrapped start-ups made big with a property loan.

Bootstrapping is not a new idea to start a new venture, every individual have some dreams in life to be self accomplished. Everyone doesn’t go for salaried job, some wishes to establish new business by investing in some infrastructure. But it is not as easy as it seems, because investing in buildings, plots or under construction buildings needs lump sum amount.

Though it is a new fad but mere bootstrapping cannot serve the expensive purposes. On such occasions property loan comes to action to cover up the required amount to invest in some property either for staying or setting up the business. So it helps the borrower to invest in the asset of his choice, without stressing their pockets.

Property loan helps the borrower to get a lump sum amount of money from the financer to buy a property, which can be anyone from the above mentioned list of assets. Smita has always been a keen learner, in love with studies. After excelling in her academics & career, she decided to start an IIT coaching centre for the aspirants. Her savings helped her to kick start the venture, but in order to extend it, she required a lump sum amount. So she decided to approach RBI authorized financer to get the loan.

Before approaching the lender, she collected all the required information available in the online website of the concerned financers in the market.

Then she combed down three or four financers who had few of the specified features, mentioned below:

• The combed financers in her list offered her competitive interest rates for maximum loan amount, depending on the loan slab.
• They were offering assistance for property selection from authorized chain of builders.
• The documentation were claimed to be hassle-free with minimum essential documentation.
• They were offering flexible repayment options with longer tenure.

All the above mentioned features are quite attractive for the borrowers. The factors which helped Smita to choose the one from the four combed lenders were their easy terms & conditions, market goodwill & good reviews from the existing borrowers.

The bootstrapped start up of classroom coaching evolved into an IIT coaching centre with the property loan. Many people like Smita are coming forward to join the bandwagon of loan eagerly. They don’t have to stress their budget with expensive EMIs and short tenures. Once can comfortably pay back the debt with small installments for a longer tenure of almost 30years.

On top of that, they have the flexibility to increase their EMIs with increase in income, so that the borrower can easily & quickly payoff the loan, without counting savings for paying the extra interest cost.

Only make sure that you have a good credit score, disciplined banking statement & no existing debt, when you are applying for the property loan. It not only streamline your loan process but also helps you to get the scope to negotiate for the interest rates and get maximum loan amount that you are eligible for, depending on the loan slab.

The best thing you can do after online research is that take professional advice for making a well informed decision. Debt is meant to be paid without fail, so it’s better to evaluate your financial profile & affordability before taking a property loan.

All the best!

Loan against property can serve your immediate fund requirement.

There are many situations in our life when we need lump sum amounts of money for immediate personal requirements. Asking for financial help from relatives or friends is the last option we would look into. Getting a personal loan can be expensive with high interest rates. Loan against property is the best option for the people who have commercial or residential property to mortgage and get the required amount as loan from the lender at an affordable rate of interest. There are various purposes when we need lump sum amount, but getting the amount quickly and at affordable rates become difficult. In such situations a mortgage loan can help.

One can avail a mortgage loan against the fully constructed property, commercial & freehold residential properties. So if you are in need of immediate funds and have any of the kind of aforesaid properties then you can go for the loan against property. You can get the loan for various purposes of:

• Starting a new business or extending an existing business.
• Marriage, treatment expenses and other personal expenses.
• You can get the mortgage loan for transferring the outstanding loan availed from any other lender.

These are few purposes; your purpose may vary, so it is better to consult the lenders before taking the loan and getting your queries cleared. You can apply individually or jointly for the mortgage loan. Depending on the borrower’s financial profile, age of the applicant and the property; the tenure can be stretched up to 15 years. The maximum amount of loan money the applicant would get varies from 50-60% of the mortgaged property’s present price. The interest rate is determined depending on the loan slab, type of interest rate & nature of the property (residential/commercial), which lies between 9.5-11.5%.The processing fee is around 1.5-2% of the loan amount.

It is better to unlock the potential value of your property and use it for your purpose, than getting a personal loan and pay the debt with high interest rates. There are some benefits you get, when you mortgage your property and get a loan:

• The loan tenures can be stretched up to 15 years.
• Longer loan terms, reduces the EMI burden. Making the debt repayment hassle-free and are easily absorbed by the monthly expenditures.
• The interest rates on the loan against property are less compared to the personal loans. Affordable rates ease the debt repayment.
• Easy and hassle-free documents make it easier & faster to get a mortgage loan. So the purpose is solved quickly and easily.
• Loan repayments are easier with monthly EMIs.

All you need to submit the required documents for establishing your identity, address, and job and the bank statement reflecting your expenditure habit and loan repayment discipline. Along with basic documents you need to submit the papers of the property you want to mortgage and proof of no encumbrances on the property are required to be submitted. After getting the loan; repay the amount as soon as possible.Avoid skipping your repayment installments, because it will not only hamper your credit score but may risk your mortgaged property.

Planning your child’s marriage? Consider a loan against property!

There are some turns in our lives, which calls for financial attention. Your child’s marriage is one such turn, our Indian families are abided by traditions and they consider their child’s marriage to be one of the biggest responsibilities along with their health & education. During such occasions, you need a lump sum amount to arrange a grand function for your child’s marriage. On such instances unlocking the potential value of your property by mortgaging it can serve your purpose. The financers offer you loan against property and give you the required amount depending on the present market value of the concerned property. You can mortgage your residential or commercial property, to get the required amount.

If you would go for a personal loan for the purpose, then chances are there that you may end up paying high interest cost for a short period of time. If you opt for a mortgage loan then you can enjoy following benefits:

• You can get the loan not only for marriage purpose, but you can get the loan for business extension, child’s education, treatment or any personal need.
• Mortgage residential or commercial property.
• Get the maximum amount of the loan value that varies from 50-60% of the property’s present market value.
•  Flexible repayment options with EMI based loan or overdraft facility.
•  Maximum loan tenure for easy repayment.
• Attractive interest rates.
• Loan against property is for both the salaried & self employed.

Depending on the loan amount slab the rate of interest is determined, which varies from 10-13%, for 15years. Affordable interest rates and long repayment terms make the mortgage loan a handy option for immediate fund requirement.

To take the mortgage loan for your child’s marriage, start planning beforehand, so that you get the required amount in time. Go through the online aggregator sites and compare:

• maximum loan amount they offers
• rate of interest along with the maximum tenure
• repayment options they have

If you select your financer after comparing the aforesaid elements, then you can get a good financer, who can help you to serve your purpose. In order to lessen the EMI cost, never stretch your loan tenure, because it may reduce the EMI figure but it increases the interest cost. Make use of the EMI calculator available in the aggregator site or in the financer’s web-page and get an idea of basic debt fund structure and adjust your expenses accordingly. When you are taking the money for your child’s marriage, chances are there that you are closer to your retirement phase, so planning is very necessary, a single mistake can over burden you with debt.

Getting the loan against property is easier and quicker, but the repayment of the debt can be exhaustive so make sure that you take the required amount only and your monthly income source can easily absorb the EMI cost so that you can easily repay your debt. Though you are mortgaging your property to serve a particular purpose, but don’t risk it by being a defaulter. Check your financial profile & affordability before taking the loan against property.

Here are 5 things to remember before taking a loan against home.

A loan against home, also known as loan against property or mortgage is a great way to meet any of your dire funding requirements. A loan against property is also one of the most common borrowing instruments among borrowers. This is because of the quick approvals, minimal documentation and convenient repayment options available on these kinds of loans. That said, loan against property is a good option, but before you opt for one, here are some points to remember.

First and foremost, the interest rate:
The interest rates for loan against home range between 10 and 14 percent. This is a little higher than normal home loans or education loans. So it’s advisable to opt for a loan against property only and only when you require funds for a purpose other than education or home renovation. Because even a percent or two less and you could end up saving a considerable amount in the interest you pay. So only opt for a loan against property when not able to receive a loan specific to the purpose you need the funds for.

Loan amount:
With a loan against home, you stand to receive anything between 40 and 70 percent of the market value of your home as the loan amount. This can go up to several crores of rupees depending on the value of your house. Keeping this in mind, it’s wise to opt for loan against property only when the market value of your home is high and other borrowing instruments don’t provide you with adequate fund for your needs. Also, with loan against property, it’s not advisable for small loanamounts as it doesn’t make sense putting your home on the line for a small amount. Only when the financial need is very large you should go in for this kind of loan.

Tenure:
When it comes to tenure, loan against home has an edge over other borrowing instruments. Tenures for loan against property can go as high as 15 years, which is much more thana personal loan. This also means you have more time to pay a smaller EMI. If you take out a personal loan, you will have a shorter loan tenure and larger EMI; this could put a strain on your income source and upset your financial standings, whereas loan against property affords you the luxury of a smaller EMI that can be paid over longer periods of time. The only catch is point one, higher interest rates, which mean you pay more in terms of interest.

Tax benefits:
Unlike other borrowing instruments such as educational loan or home loan, the loan against home doesn’t provide much in terms of tax deductions on EMIs. However, if you take out a loan against property for business reasons then the borrower may apply for tax deduction on interest paid. But for this, the loan taken must be used for expansion of business and there should be some proof to support this claim.

Processing fees:
Just like all other loans, the loan against home also invites a processing fee. Most banks charge one percent of the loan amount as a processing fee, but non-banking financial institutes can charge you up to two percent of your loan amount as processing charge. So whilst opting for a loan against property it’s wise to compare these costs as well whilst comparing all other variables before fixing on a particular lender.

All-in-all, a loan against home is the best way to get your hands on a large chunk of money for any other purpose besides home renovation and education. It is a great way to arrive at funds to expand the business and if you’re thinking about one, you should definitely go over the above points with the sales representative of your lender.

‘Loan Against Property’ your best friend during financial needs…

It's an age-old concept that your property is said to be the best investment that will reap you benefits whether you stay in it, rent it or sell it after a couple of years. However, another golden corner of modern times of owning suitable property is to take a loan against property. People need to fulfill wishes or responsibilities at every stage of life. It could be taking the first step of your new business or children education or daughter’s marriage expenses. The needs and demands are never complete. Borrowing finance from traditional financiers would be a cumbersome job. Besides incurring hefty interest rates on the loan, they have stringent payment measures and lesser time for loan repayments.

Therefore, many banks and finance companies in India have introduced a unique and most beneficial way of taking a loan against property to finance your dreams. These loans come at a fairly low-interest rate, flexible repayment tenure and ample amount of time for repayments.

If you’re wondering how to apply for loan against property, the amount you get qualified for then here are few answer to address your concern

Amount

The loan amount depends upon your age, maturity age of the property, area and the market value. After examining these factors banks or NBFC will quote a value to offer you as a loan. They have interest rates like fixed or floating, semi fixed & floating rates. So, based on your income source and risk appetite you can take the loan amount and set your interest rates.

Credit Score

While applying for a loan against property its important you maintain a good credit score. If you fail to do so you might get higher interest rates or the loan application might get rejected as well. So, its better you make all your payments regarding other debts, credit cards on time to maintain an extremely good credit score and qualify for the best deals.

Market Value

The market value of your property makes a huge difference in qualify amount. The loan amount is based on the current market value. So, if it's dipping you will get lesser loan amount alternatively if its rising you has the advantage of taking a top-up loan as well.

These loans can be applied for by an individual, either solely or jointly (in most cases spouse). The most important part is that most people think property mortgage means handing over the property to the bank or private finance companies. However, it’s a big misconception. Even though you take a loan against property, you still enjoy the occupancy of your property.  It’s only in dire conditions that if you’re unable to make repayments that you will have to handover the property to the bank or finance firm.

While the loans are available at a relatively lesser interest rate of around 10 to 12% the repayment tenure for such loan varies from around 10 to 15 years based on the bank or finance firm you wish to take a loan and your existing relationship with them. For a better understanding of documentation & fee structure, you can always visit the relevant site and make sure the mandatory documents are available at the earliest for the application.

To apply for a loan against property you can visit the website of desired bank or finance firm, fill up the application form, attached scanned copy of documents and hit the apply button. Within a couple of days, you’ll be informed about the loan status via phone or email. Thus, at the touch of the button on your smartphones, laptops or computers you can arrange finance to turn your dreams into reality.

Here are 3 occasions a loan against property can come in handy.

The phrase ‘life is a roller-coaster’ is quite true. No one can predict its ups & downs or its twists & turns, we’re just all in for the ride! And when life throws us a curve, we often tend to look to people around us for help.  This is especially true in case of a financial crunch. When we need urgent funds, we look to family & friends for help. But there’s another way to ride out financial crunches, and it’s called a loan against property.

A loan against property is a quick & hassle-free way to get your hands on a large amount of money. If you’re in urgent need of funds then look no further than this efficient borrowing instrument. It offers you up to 60 to 70 percent of your home’s current value as the loan amount. Not only that, it also offers you the option to choose a long tenure of up to 15 years; allowing you the luxury of paying the loan at leisure. What’s more is that, in comparison to personal loans, the interest rate is also very less and will range between 11 to 16 percent. And if you need the funds urgently, don’t worry, the quick processing time of these kinds of loans is another plus point.

Wondering how this instrument can help you in times of needs? Read on, this article will look at four common occasions a loan against your home can help you out.

Most common occasion; new business or business expansion.
Running a business takes a lot of money and is no cake walk! Sometimes, as an entrepreneur, you might require urgent funds to build a new business or to take your existing business to new heights. In times like these, you will look for potential investors, who will have their own terms for lending you the money. Or you will have to go through that embarrassing process of asking family & friends. But why do all that when you can support yourself with a loan against property? You can get a substantial amount of money quickly and without much of a hassle. With a mortgageloan you can also get tax deductions if you can effectively prove that the loan was taken for business expansion.

Second most common scenario to take a loan against property; education:
Now you might be thinking why someone would take a loan against their home when they can go in for an education loan. But this is where the hassle-free application process of a loan against property comes in handy. As long as the home is in your name and you have proof of the ownership, you can easily get a loan without much of red-tape or formalities. What’s more is that the interest rate will be around the same but the tenure of a home loan is a little longer, allowing you to pay back the amount with ease.

Lastly, wedding expenses:
Weddings are always extravagant! And though they might be the most memorable occasion for the two people, they are also equally financially demanding. Thus to cover the cost of a wedding, most people turn to personal loans. But in comparison to mortgage loans, personal loans seem like financial traps! With a loan against your home, not only do you get higher loan amounts, but the processing time is also less, the interest rate is also lower and the pay-back tenures are also longer!

These were 3 of most common instances you might require urgent funds, which also make them 3 instances a loan against property can help you out remendously! If you need to know more about these loans, speak to a loan advisor today!

Pointers to consider whilst investing in reality with a property loan.

Many of the world’s business tycoons found their beginnings dabbling in reality. And with rising property rates and growing population in metro cities, investing in property is, most often than not, a financial sound decision. The only problem is buying a piece of land or an apartment is financially out of reach for the most of us. This is where home loans come in handy!

Home loans offer an easy way to finance your investment in property. They give you the liberty to pay some amount out of your pocket while the rest of the cost is provided by the bank or non-banking financial institute. Add to that lower interest rates and long payback tenures and you get the perfect instrument to make your investment dreams come true!

But before you take the dive and opt for a property loan, here are some things to keep in mind that will ensure your loan experience is a smooth one!

Top on the list is to take an EMI you can afford!
One of the main aspects of a property loan is the EMI you stand to pay. Remember that it’s going to put a dent in your monthly income for the next 10 to 15 years and so you shouldn’t over stretch yourself! Some fall prey to a large EMI, thinking their increasing salary should be able to cover it in the coming years. Some may think the larger the EMI, the lesser the tenure and the lesser financial burden of the loan. These thoughts could result in you defaulting on your loan! Rather it’s better to follow this golden rule, never let your EMI exceed 40% of your income. If in future you do earn more, you can pre-pay your amount through the payment of additional funds.

Tip two, give some thought to down payments:
No lender will foot the entire cost of your property, you will have to contribute some amount towards the purchase of the property. Some lenders will provide you up to 90% of the amount you need. But if you have enough funds available, go in for a larger down payment, this will help reduce the financial burden of your loan in the future.

     

Tenure of the loan:
Now it’s time to decide the tenure of your loan. Opting for a longer tenure might give you a small EMI but you’ll end up paying more interest over the years, choosing a tenure that’s too short will bump up the EMI and you might not be able to handle the financial strain. One expert says that it’s wise to go in for a long tenure because over time your salary is bound to increase, in which case you can make additional payments and pre-pay the loan amount thus cutting down the tenure of the loan.

Tip 4; choose the right type of interest rate:
With property loan, most lenders will provide you two options of interest rates, fixed and floating. Fixedinterest rate, as the name suggests means your interest rate will be fixed and will be protected from market fluctuations and RBI amendments. On the other hand, floating interest rates fluctuate based on market standings and government policies. Meaning, if the market is on the rise then there is a chance your interest rate will drop. Further, if government policies call for lower or higher interest rates, you stand to benefit or suffer from the same. There is a third options some lenders offer, semi-fixed, wherein for the first few years your interest rate will be fixed, following which it will take up the floating interest rate. Before fixing on either one, it’s ideal practice to monitor economic signs such as inflation and interest rate movements. Also keep track of the RBI’s policies, this will allow you to gain insights into the future norms of the interest rate cycle. But most importantly, analyze your personal needs and only then decide which best suits you.

Next, learn about charges & penalties involved:
There are many charges involved with a property loan such as legal verification charges, stamp duty, processing fees, switching fees (in case you transfer your loan or change your EMI or interest type), defaulter penalties, etc. Before fixing on the loan, ask the lender for a written list of charges.

Next tip, take on an insurance plan:
In case of your untimely demise, disability, loss of job or some critical illness; an insurance policy will ensure your loved ones are safeguarded from the financial burden of the loan whilst also keeping the property in your name.

Last tip, make use of the tax benefits:
Ask your financial advisor about the tax benefits for property loans under section 80C and 10D of the Income Tax Act, 1961. These sections will help you get tax deductions from your annual income and give you a way to save a substantial amount of money!
These are just some pointers to help you smoothen your property loan journey! Speak with a financial advisor before fixing on a loan.All the best!

Important Steps to getting a home loan against property.

Loan Against Property Avail HDFC's loan against property for your personal or business needs. Both residential and commercial properties can be mortgaged for taking a property loan.

5 essential things you need to know before taking a loan against property.

Taking a loan against property isn’t as tedious as it was before. Many banks and non-financial institutes now offer loans against property with applications that can be taken out directly from their websites. So if you’re looking to take such a loan, you can rest assured to receive one without much of a hassle. But before you do so, here are some absolute essentials you need to go over, just so you know what you’re getting into and to ensure your entire loan application process begins and ends much smoother.

First you need to know what your property is worth.
Before going in for a loan against property, it is essential to know the accurate value of the property you wish to mortgage. Otherwise you may expect a certain loan amount but your property might not fetch that amount, causing your further plans to come to a halt before even applying for the loan. So before you apply for a loan against property it’s an ideal practice to ascertain an accurate value of the property to wish to declare in exchange for the loan amount.

What is the loan amount you can expect with a loan against property?
To begin, the loan amount cannot exceed the value of the property. But you can expect somewhere in the ballpark of 70% to 90% of the value of your property as your loan amount. So say you property is worth 1CR, then you stand to receive anywhere between 70 to 90 lakhs as the loan amount. The amount you receive as part of your loan will, however, vary from one financial institute to another.

What is average interest rate when it comes to loans against property?
Knowing the interest rate is an absolute essential before taking out a mortgage loan, or any other loan for that matter. Getting to the point, if you are planning to take out a loan against property, you can expect to dish out anywhere between 9.65% to 16% as interest depending on the loan amount and the financial institute you choose. A word to the wise is to always go interest rate shopping; there are numerous sites on the internet through which you can find a comparison of interest rates for loan from varying banking and non-banking financial institutes.

What is the maximum tenure for loans against property?
Again, this is something that will vary depending on the loan amount and the financial institute. However it’s worth noting that the maximum tenure is 15 years or 180 months. The tenure is also bound to vary depending on certain criteria specific to your loan.

Real estate ownership and other fees involved.
If you are the sole owner of the property in question then you will have no problem acquiring a loan. But if the property is co-owned, then the other parties will need to agree completely with your decision to take out a loan against property. If the property is disputed, or you cannot furnish all the documents for the property or the co-owners do not agree with your decision, then there is high chance your loan will not be approved. As far as other fees involved, apart from the interest rate, you can expect to pay other fees such as processing fee, pre-closure charges, sales tax, agent cost and more. Familiarizing yourself thoroughly, with all these charges or fees that have to be paid for before applying for a loan is an absolute essential.

Now that you know the absolute basics when it comes to loans against property, you can fearlessly weigh your options and take out a LAP with complete peace of mind.

Loan Against Property An Overview.

Loan Against Property Avail HDFC's loan against property for your personal or business needs. Both residential and commercial properties can be mortgaged for taking a property loan.

Thinking of taking a loan against property? Here are 5 thumb rules to follow.

Taking out a loan against property is no walk in the park. It is in all respects, a serious matter and hence there are some ground rules you need to follow to ensure a smooth journey with a loan against property. So before you pick up a pen and sign the application form, verse yourself with these thumb rules.

Borrow within your financial capabilities.
Before you commit to a loan against property, it’s worth it to calculate your financial standings and repayment capacity with regard to the amount you borrow. Remember the loan amount you receive will be in the range of 70% to 90% of the value of your property with an interest rate varying from 9.65% to 16%. Also take into consideration that it is a rough thumb rule to ensure that your monthly expenditure towards all your loans combined is not more than 50% of your taxable income. Keeping these factors in mind, if you think the loan against property is still a viable option, then and only then, you should go ahead with your application.

Short tenures work better in the long run.

The maximum tenure for a mortgage loan is 15 years and though it may seem very alluring to pay a smaller EMI over a long tenure, bear in mind that long tenures invite higher interest rates. So, if you do choose to take a long tenure, you will inevitably end up paying more on the long run. Therefore it makes sense to take out a loan with shorter tenures. And if your financial standings cannot support a larger EMI now, you can always approach your lender ask them to increase your EMI as and when you financial abilities better year upon year.

Insure yourself.
Mortgage loan generally mean large loan amounts and so taking out an insurance cover along with your loan makes sense in the rare occurrence of any dire circumstance. In which case all your family members, or who so ever you wish to insure, remain protected, come what may. This thumb rule is just so you leave nothing to chance.

Read all offered documents carefully.
All the terms and conditions for the loan have to be mentioned in the documents offered to you before you take out the loan. It’s advisable to sit down with someone who’s well versed with the topic and understand each and every point. Just signing it without studying it could lead to you getting blindsided in regard to any hidden costs or additional charges such as processing fees, pre-closure charges and sales tax. So read, understand and study the fine print before you put your signature on anything.

Shop till your interest rates & processing fees drop.
Last but not least, it’s imperative that you weigh all your options, consider every possible choice and look at every single alternative before picking a loan against property. By this we mean, go to many financial institutes, understand their offerings, see which one gives you a better interest rate, or loan amount or lesser administration and processing fee and only pick an option that completely suits your needs.

A loan against property is the best way to raise funds for your needs and is always a smart and secured borrowing option. But be sure to follow these rules and you will see that your experience with such a loan will be a much smoother and convenient one.

Loan Against Property – The Process.

When you apply for a Loan Against Property, it is often a mystery what happens after that. How do the banks evaluate your application? What are the steps followed and how does each step affect your loan application? These are some of the common questions that come to mind once your application is logged in.

Let us take a step by step look at the process:

1. Documentation: The necessary documents i.e. personal documents as well as property documents are collected from the applicant. Also, a completed application form with signatures in the required fields will be collected.
2. Note: The signatures across all the documents as well as the application form must be an exact match; even the slightest mismatch can lead to your application being rejected.
3. Login: After careful checking of the application, the data is formally submitted to the bank authorities for further processing.
4. Personal Discussion: The applicant or applicants (in case there are co-applicants) will be called for a one on one discussion with the loan officer. In this discussion, the applicants can clear any doubts or questions they may have regarding the loan against property process.
5. Credit Appraisal: Your credit history or more specifically your credit information report which includes records of your previous loans and credit cards will be verified by the credit officer at the bank where you have applied for your loan against property. Naturally, they would like to get to know your repayment track record based on which your application may or may not get cleared for further processing.
6. Legal valuation: Once your application has cleared the credit appraisal, the next and perhaps the most vital stage is the legal valuation of the property you have pledged. See, every bank will have their own legal team of advocates and field experts who will not only cross verify all the necessary property documents, but will also visit the location to determine the age of the property, and that there are no legal violations such as construction beyond the specified area, unapproved plans or construction. These factors will help the team arrive at a particular value for the property, based on which your eligibility to borrow will be determined, since not more than 70% of the value of your property will be given as loan against property.
7. Approval / rejection: On successful completion of your credit appraisal as well as legal valuation, the loan will either be approved or rejected. The final decision is at the sole discretion of the bank or financial institution where you have applied. As long as the documents as well as the on field verification ended positively, there should be no hassles in your loan getting approved.  However, even if the slightest discrepancy is found during the verification process, your application is bound to be rejected without further ado.
8. Agreement signing: After prior approval of your application, an agreement on your loan against property will be delivered to you. Make sure you read the agreement carefully and understand the gist of what is written in there. It is definitely important for you to know the contents of the agreement so as to know what you are signing up for.
9. Disbursement: Once the loan is approved and the agreement is signed, a few post dated cheques are collected from the customer. This is done in order to ensure that the emi is paid in case the electronic clearing service (ECS) does not work for some reason. After this, the loan is disbursed as a onetime payment to the applicant.

{Source: http://www.rupeezone.in/articles/loan-against-property/loan-against-property-the-process/}

Benefits of Loan Against Property.

Loan Against Property Avail HDFC's loan against property for your personal or business needs. Both residential and commercial properties can be mortgaged for taking a property loan.

Loan against Property: an overview.

Loan against property is one of the best examples of capitalizing the financial value of a property. In this module of loan, a borrower takes loan from a bank or a financial institution. This module of loan clearly displays how property value can help you in getting loan sanctioned. In this loan module, a property is kept as collateral security and the borrower can use the loan amount for his personal requirement, it can be for higher education, for developing/funding business, or for other legitimate purposes.

The property kept as collateral security can be a residential property as well as it can be commercial property. Generally, at the time of loan disbursement, 50-60% of the property value is considered as the loan amount. The property is kept mortgaged to bank and it is considered as a secured loan as the property mortgaged works as the guarantee for the borrower.

Eligibility Criteria for Loan against Property

Eligibility criteria for availing loan against property may vary from one institution to other, but in general there is a similarity: the eligibility mostly depends on the income profile of the borrower. The basic eligibility is validated for the genres of applicants:

• Salaried individuals: The applicant should be a permanent employee with the government or a well established company. Minimum age of the borrower is 25 years.
• Professionals: The applicant has to be a professional for example, doctor, engineer, architect, chartered accountant, etc may apply in these category. Maximum age of the applicant is 65 years.
• Self employed: The applicant should be a regular tax payer by fling income tax returns. The individual must have been in the same business for a minimum number of at least 3-5 years.

Besides income eligibility the property to be mortgaged needs to be free of all sort of legal litigation and the property should be in the name of the applicant.

Documents needed for the loan against property processing:

• Legitimate proof of residence can be current utility bill or ration card.
• Salaried individuals need to produce their salary slips for last 6 months.
• Self-employed individuals should present a certified financial statement for the last 3 years.
• A copy of the latest bank statement for last 3-6 months.
• Duly filled loan application form with the latest passport sized photograph.
• Self-employed individuals need to present proof of existence of their business and related business profile.
• Self-employed individuals are expected to supply details related to their educational qualifications.
• Copy of income tax returns for last 3 years should be presented.
• Processing fee check.
• All property related documents, including the approved building plan of the property should be attached with the loan application.
• Copy of details of all existing loans.

Interest Rates for Loan against Property

An individual who needs a loan against property may decide between two options of interest rates. These interest rates may vary according to the duration of the loan.

• Fixed Interest Rate: This interest rate stays fixed throughout the loan duration. It varies from bank to bank but the general rate lies in the 11 – 15% per annum range.
• Adjustable Rate: This interest rate is not fixed and static; it varies at par current market setting. This module of interest rate could be beneficial for those who wish to avail the loan for a short duration.

Loan against Property EMI Calculator

The EMI for Loan against Property can be calculated using the easy formula mentioned here.

EMI = [P x R (1+R) N]/ [(1+R) N-1]

Where,

• P is the loan sum in use
• R is the valid rate of interest
• N is the tenure (number of months) of the loan applied.

Loan against property is a great facility where short term loan is needed against property. However, before mortgaging a property, its pros and cons should be properly judged.

{Source: http://bankhelpline.com/blog/loans/loan-property-overview/}

Things you must know before taking Loan against Property.

Loan against property (LAP) is also known as ‘Home Equity Loans’ and is a kind of loan against the security of one’s property. Loan against Property is considered to meet the financial needs of a person who before now has a house, which is free from any burden.

How much loan can you get?

To calculate eligibility of loan against property, a lender will look at a certain percentage of the market value of your property and your repaying capacity. The lender will also look at your repaying capacity by taking into account your income minus other equated monthly installments. There is also an age limit to take this loan; minimum is 21 years and maximum 60 years. The minimum loan amount you can get is Rs.5 lakh and maximum depend on upon the client.

What are the documents you required?

• ID proof (PAN Card, Driver’s license, Voter ID, Passport, Aadhar)
• Address proof (Electricity bill, Telephone bill, Ration card, Bank statement, Credit card statement)
• Passport Size Photo
• 3 month’s Salary slips
• 3 month’s Bank statement
• Last 2 years Form 16
• Sale Agreement
• Property documents
• Receipt of Booking/Advance payment (If any)

What’s the interest rate and tenure?

Ever since loan against property are secured loans, since you credit your property with the lender to gain, it is cheaper than personal loans. The tenure of the loan against property can go up to 10-15 years.

{Source: http://www.finheal.com/blog/things-you-must-know-before-taking-loan-against-property/}

How to Detect a Dishonest Mortgage Loan Officer.

Loan Against Home Avail HDFC's loan against property for your personal or business needs. Both residential and commercial properties can be mortgaged for taking a property loan.

What you must know about Loan against Property.

The most universal tradition to obtain funds is to take a loan. The loan might be a personal loan for the requisite amount or you possibly will take a loan out on your property.

A loan against property (LAP) is a loan given or disbursed against the mortgage of a property. The loan is specified as a firm percentage of the property’s total value, usually 40% to 60%. This loan falls beneath the secured loan category where the property is used as security. These loans can be in use for various reasons such as financing your commerce, meeting family obligations such as marriages, the purpose of higher education, funds of medical treatments or your personal reasons.

The loan can be taken out of your self-occupied or rented housing property. This can be a house or still just a plot of land. To be qualified to apply for a loan against property, banks must endorse the following field of the applicants:

Your income, savings, liability obligations

Cost/value of the possessions mortgaged

Repayment track evidence for other loans, credit cards, etc.

At the same time as most banks have another criterion as well; these three are widespread amongst them all. The interest rates on loan against property start from 10.45% and the tenure is for 15 years.

A loan against property is one of the finest ways to lift money. The only drawback of this kind of loan is that if the borrower is not capable to pay back the loan, the bank takes ownership of the property which was used as security. So, before taking this kind of loan, one is supposed to take into account how dependably they would be capable to pay back the loan.

{Source: http://www.finheal.com/blog/what-you-must-know-about-loans-against-property/}

The anatomy of reverse mortgage.

Loan Against Home Avail HDFC's loan against property for your personal or business needs. Both residential and commercial properties can be mortgaged for taking a property loan.

Why Should You Calculate the EMI before Taking a Home Loan?

Deciding the amount of the loan depends on the affordability of the emi.  Every financial institution will first check how Much Emi An applicant can afford paying and on the basis of the amount of the loan is decided and the home loan is sanctioned.  Thus it is recommendable that the applicant should also check the emi he will have to pay to the bank every month using the home loan Emi calculator.  This will not only help him in checking the Emi That Is payable but also he can check the amount he is eligible for.

Aspects that affect the Emi

Mentioned below are the three main factors that help in deciding what can be the Emi on the loan.

Income:

Income plays an important role depending on the income the lending institutions render loan to an individual. The emi amount should not be less than 40% of the monthly income of the individual.  This is to make sure that the loan applicant has enough money to meet his expenses. Even though an individual is optimistic about the rise in the income he should also take into consideration factors like the inflation rate, job security and the emergency requirements. The emi should not exceed 40 % of your income. An individual should have at least 15% in his hand to save and use for other purposes.

Changes in the rate of interest:

When you calculate the emi using the home loan emi calculator the interest rate plays an important role.  Though low home loan interest rate might attract you to avail for a huge home loan amount it is not advisable to do so as an individual needs to have some money to be used for emergency purposes.  Also the choice between the fixed and the floating interest rate will help you in saving and you can save on the Emi. If you opt for floating interest rate the percentage of the interest will depend on the market fluctuations and thus the interest paid is generally low.  But for fixed interest rate the interest rate remains fixed throughout the repayment tenure of the loan.  Generally if a person wants to cut down not the interest rate he can opt for floating interest rate.

Expenses related:

 While an individual decides to jot down the expenses it is very important that he needs to calculate the emi using the home loan EMI Calculator along with this he can also calculate the monthly expenses that occur for him during a particular month. This will help in planning the month without creating any financial burden on him. Thus, he can make sure that he has enough necessities while he dreams to own a house.

Why is necessary calculating the EMI?

Calculating the emi with the help of the home loan EMI calculator helps in determining the loan amount which is to be borrowed. It is essential to calculate the tenure of the loan to check the affordability of the loan.  It is also necessary to compare the pick the best home loan offered lending institutions which has additional benefits like the lower home loan interest rates

The home loan emi calculator is different from the other types of loans. Thus when an individual is planning to apply for a home loan he needs to decide and make use of these online home loan emi calculator to avoid the further confusion. Earlier the emi was calculated manually which has manual errors. But now a person can simply visit the website and calculate the emi he needs to pay for the next 18 years.

The Truth About Texas Property Tax Loans.

Loan Against Property Avail HDFC's loan against property for your personal or business needs. Both residential and commercial properties can be mortgaged for taking a property loan.

Fine Points Relating To Loans against Property.

Loan against property is that loan that is given by a bank or financial institution when a Borrower mortgages his/her property to the bank. The loan is not equal to the whole market value of the property but is a fraction of it. The amount of the loan varies from 40% to 60 % of the total loan amount.

As the bank gets a security for providing you the loan, the loan is offered to you at a lower rate. A personal loan in India is given at a repayment interest rate of 13 to 25% where as the loan against property can be availed at a rate of 11% to 16% interest rate.

You can also A apply for loans online in India.

Fine Points about Loans and Loans against Property Eligibility

• If the property that you have mortgaged has more than one owner, all the owners are required to apply collectively for the loan.
• Loan against property can be taken against a range of properties. Whether you own a plot, a house, live in the house you wish to mortgage, you can take a loan against it. You can also take loans against a property that you have rented to others. The property must be freehold, and you should be the owner of it.
• The bank will check all the documents related to the property. During the loan process, you will be required to have documents that show that you have the title of the property, telephone bills, electricity bills, and residence proof. Identification proofs in the form of PAN card, passport or voter ID card are also required. In case you are a salaried employee, your bank statements for the past 6 months would be required. If self-employed, the bank would require financial statements and balance sheets of the past 2 years.
• At most banks, the minimum age required is 21 years, and the maximum age is 60 years for an employed person or 65 years for an unemployed person.
• Further, the banks also review your financial reputation by accessing and reviewing your credit score. If you have a good financial track record and have a good credit score, then the loan will be granted to you rather easily. The bank will access your repayment capacity and grant you the loan when satisfied on all counts.

{Source: http://blog.loanbaba.com/fine-points-relating-to-loans-against-property/}

Loan against Property Benefits more than other Loans.

There may happens a situation, when you are in dire need of money for some reason, and options like borrowing money all the way through friends or family members are always obtainable to you. There are some more options which can lift large sums like loan against property or more commonly known as LAP. It is a suitable and easy means to have access to the funds and meet the financial requirements with the help of the banks at lower rate of interest. You can make use of your property to have a right to use to the funds as offered by the banks. In general cases, the banks offer as much as 70% of the loan amount based on the estimate of the property being offered by you as collateral.

Benefits of Loan against Property more than other Loans

One must always keep the truth in mind when we talk about loan against property that this loan is a secured loan. Therefore the bank by no means hesitates in offering a good loan amount against the property being used as collateral.

Cheaper Loans Choice

While several loans are obtainable in the market like personal loans, the loan against property holds an enormous advantage when in contrast with such loans. The loans against property are the cheaper loans comparatively personal loan and thus, are an effective way to meet your needs and demands throughout the times of financial need. Another fact states so as to, only home loans are cheaper than the loan against property and therefore one can fairly simply appraise the helpful part allowing for the rates of interest.

Long Tenure

Another advantage linked with the loan against property is the loan tenure, which is much longer in this case, while personal loans, have a short period ( a maximum of 5 years) for loan repayment, the loan against property is a good alternative, with the tenure extending to around 20 years, in case, the loan amount is high.

Small EMIs

Since the loan tenure is of long duration, the EMIs are automatically going to be little. The EMIs are small and thus making it simple for the borrower to pay the loan amount and its interest with much easiness.

Secured Loans

While the loan against property is a secured loan, claiming for this loan is fairly easy in contrast to the other loans, which is an essentially high effort to get empty. The only requirement for this loan is a clear title of property and all the essential proofs sustain it.

Property Options

The options are broad when it comes to putting the property as security in case of a mortgage loan. An individual can set off either a residential property or a commercial one for the reason of a seeking loan. Even, one can claim the loan against the property with the piece of land or even through the property under construction, thus as long as a wide range of options for the people looking for the loan against property.

EMI Based Loan or an Overdraft Facility

Several banks offer a feature linked with the loan against property in the form of the paying up of loan amount either in the form of EMI Based loan or an overdraft facility, suiting your needs. The overdraft limit will be resolved by the estimation of the property and your account history.

Fulfill All Your Needs

While the loan against property can be used to assemble all the needs of your personal life, there is no limit attached to this loan. Well, apart from personal loans, one has to supply all details of the exact purpose of the loan. For example, in the case of an educational loan, you need to furnish all details of the educational, financial needs, marriage loans, car loans require the car to be bought etc. The amount as claimed beneath the loan against property can be used in all legal demands and needs of the person and one can use the money in the way, the person desire.

For example, one can employ the money in increasing the business or for vacation. One can support the medical treatment or for studies of kids or marriage of their kids or any other life event. Even, it can be used to close off other high cost loans, which are affecting your personal life or the way you live.

The loan against property can be used to get together all the demands and wants of an individual just like personal loans, and thus there is no link as such associated with the loan against property.

Top Up

Another significant feature of loan against property states that if the value of the property rises during the tenure of the loan, the borrowers have the choice to get a top up on the existing loans. This feature can be very helpful to the person chiefly in case, if he/she is a business owner.

Pre Closure

With the per closure options obtainable just like many other loan types, the person can prepay the loan amount and get free of the liability. Though, in a number of cases, like in fixed rate of interest cases, the person has to pay the prepayment penalty just like other loan types.

The decision to take on the specific loans totally depends on the choice of a person and the choice can depend on several other factors. While the loan against property is one of the best ways to raise funds in quick time, especially when the required loan amount is high. With almost no difficulty as long as you are able to repay the loan there are no hassle linked with the loan against property and calls out for the best option.

{Source: https://finhealcom.wordpress.com/2017/02/02/loan-against-property-benefits-more-than-other-loans/}