Purchasing a house is an indicator of our financial
stability. Experts believe that the pursuit of buying a house ends up
restricting the buyer’s financial ability. However, very few experts tell that
the house can be utilized in a wise manner. This blog posts try to shed light
on how you can use your house to achieve your desired financial goals.
Loan against Property
Loan against Property can be defined as a form of secured
loan received from a bank or a financial institution by mortgaging one’s
existing property. Loan Against Property can be used for meeting requirements
for such as launching a new business venture, its expansion, pursuing higher
education, medical expenses, working capital requirements etc.
Loan Against Property, which can be applied individually or
jointly with other persons or legal entity, can be taken as term loan with
fixed EMI or as an overdraft facility. As an OD, Loan Against Property gives
the much needed flexibility by helping meet the fluctuating requirements of
capital in a business. While Loan Against Property has no upper cap on the
amount of loan to be applied, the amount is ascertained by the banks as per the
market value of property and repayment capacity of the applicant. The loan to
value ratio normally tends to vary from 45-90% of the property’s market value
and can be availed against residential, industrial and commercial property
including a warehouse or a land parcel.
We will show how one can avail a Loan Against
Property
Eligibility: Eligibility for the loan is decided on
criteria such as age, income etc. The eligibility can be ascertained by
checking the same or by visiting the bank’s website.
Choose the right
lender: One can choose one’s lender by comparing fundamental parameters
like interest rates, application fees, processing fees and legal charges of
different banks.
Application: On
selecting the lender, the applicant has to fill the application form providing
information about financial assets and liabilities; property details and other
personal and professional details.
Documentation: Loan
Against Property applicants are mainly for the self-employed segment and
necessary documents are needed for income assessment.
Checking CIBIL score:
The credit history of the applicant is checked through CIBIL score. The CIBIL
score goes a long way in whether the customer receives the loan or not.
Technical and Legal clearance:
Before approving the loan, the property documents are legally authenticated as
the same acts as the security against the loan. Second is the valuation of the
property determining the loan amount to be given as collateral?
Issue of Sanction letter:
After the credit appraisal, the sanction letter is issued to borrower giving
details like loan tenure, repayment options and rate of interest which has to
be duly accepted and sent back to the lender.
Disbursal: At the
end of all the above procedures, the loan amount is disbursed with the
assurance that the same will be repaid within a stipulated timeframe.
Businesses can use this loan instrument to make the most of their respective
business ventures.
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