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/}

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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/}

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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/}