7 features of loan against property.

Whatever you’re personal or business needs may be, loan against property helps you meet them easily. You can apply for this loan by pledging your property as collateral. You can pledge both your commercial (shops, offices, etc) as well as self-occupied or rented residential property. You can get a loan amount which is up to 60% of your property’s worth.

This type of loan is, therefore, an apt solution to help you fulfill all your financial needs immediately. It is better to know something before you go for it. Here are 7 features that the loan against property provided by some of the best lenders has:

Suitable for all your needs:
When you pledge your property to get a loan, you will be delighted to know that the amount will be worth 60 to 70% of its market value. This means the amount you will get will be enough to cater to the most expensive of life’s events such as marriage, abroad studies, medical treatments, etc. And the interest rates are always competitive so you can pay back the huge sum easily.
Every need fulfilled:
You can use the home loan against property to fulfill any of your personal or business needs. The banks accept commercial and residential properties as the mortgage. The property can be self-occupied or rented.
Easy repayments:
These types of home loans come with attractive interest rates. Low-interest rates mean low EMIs. And low EMIs mean easy and smooth repayment of the loan amount every month.
Transparent process:
Unlike other loans, loan against property doesn’t come with any hidden fees. Whatever may be the charges involved will be told to you up front right at the time of application. This will save you from the rude shock of discovering that you are being charged for something after you have applied for the loan, and result in your financial plans going haywire.
Speedy and efficient:
Mostly, all loan providers speed up the loan approval process so you can meet your needs without a delay. Most offer doorstep service and validate and approve your loan application quickly.
Advantages of being self-employed:
Most top lenders offer special loan benefits for people who are self-employed. They are offered tailor-made solutions and options along with specially designed programmes.
Makes debts easy:
The loan providers in the market today are trying to come up with such lucrative schemes and solutions to attract people who are in dire need of funds to meet their financial contingencies. They make sure the borrower doesn’t feel burdened by the debt taken by offering mentioned benefits.

Do thorough research to find out whether a loan provider offers all these benefits and is suitable for your needs. Applying for a loan against property involves filling out an online application form, talking to the representative on the phone, visiting its branch near you, submitting your documents and getting all other formalities done.

3 things to keep in mind before opting for a loan against property.

There comes a time in each of our lives when we find ourselves in urgent need of funds; that’s when a loan against property can step in and save the day! Things like a child’s education cost, marriage expenses, starting of a new business post-retirement, expanding your current business or keeping it afloat can all be covered with the financial help of a loan against your property.

These loans provide you higher funding that a personal loan and come with longer tenures and lower interest rates as well! All this makes them the perfect option when you need lots of cash and fast. However, before you sign your name on the application form, keep these 3 pointers in mind.

1. The interest rate & processing fee.
Compare the interest rates on offer for a loan against property. Different lenders will have slightly different interest rates. Besides this, you should also compare the processing fee as this amount is a non-refundable charge that isn’t given back to you even if your application is rejected.

Most lenders provide interest rates between 9.50 and 11.60 percent per annum. As far as processing fees are concerned, most lenders charge between 1 & 2 percent of the loan amount as the processing charge, some waive off the charge completely.

2. The properties eligible for a loan against property.
You can mortgage different types of property to avail this kind of loan. Right from your residential property to a commercial shop that self-occupied, rented or vacant. Some lenders will even accept a vacant plot of land to provide you a mortgage loan.

However, you must have all the title deeds in hand and property shouldn’t be disputed. Moreover, if there are multiple owners, they will have to be in agreement with your decision to mortgage the said property, they might even have to sign some paperwork acknowledging this fact.

It’s also important that you remember that different types of property have different LTV ratios. For example, residential properties fetch higher loan amount as compared to commercial properties, the reason being that lenders feel that you will try harder to save your residence than you would to save a commercial property. That’s also the reasons why a rented property will fetch you’re a lower LTV than a residential property.

3. Remember to get insurance if you don’t have it already.
Insurance will ensure that if anything were to happen to you before you finish repaying the loan, the financial burden of handling a debt will be easier to handle for your loved ones. This is especially so if plan on mortgaging your residence. A simple term insurance should be enough to cover your debt whilst also being easy to cover as an expense.

Besides these 3 points, another thing you should do is consult a financial expert. They will be able to point out any other factors you should be paying attention to. We hope this article has been helpful,

Good luck and all the best!

3 reasons why a loan against property makes more sense than a personal loan.

A loan against property is a great way to get access to large amounts of funds to meet any of your urgent needs. However, it’s a personal loan that most people turn to when they find themselves in need of funds.

Though personal loan will provide you the funds you need to cover things like a child’s marriage, further education plans, your plan to start a new business, expand your existing business, etc. there are several reasons why taking a loan against your property will be an advantageous decision in these circumstances. This article will highlight 3 of these reasons so you can make an informed decision between the two.

1. The amount of funding on offer.
With a personal loan, most banks will normally provide 2 or 3 times the applicant’s annual income. This may seem like a lot but in comparison to the loan amount provided by a loan against property, it is still quired less. This is because, with a loan against your property, you can avail as much as 60 or 70 percent of your property’s value as the loan amount. Given today’s property values, this can work up to a sizeable amount.

2. The interest rates of a loan against property.
The cost of the funding is another important factor when deciding between the two lending options. With a personal loan, you’d have to put up with exuberant rates ranging between 16 and 22 percent per annum. These are rates are really high in comparison to those of a loan against your property that most lenders offer with interest rates ranging between 9.50 and 11.60 percent per annum. Such low-interest rates will help you save loads of money over the tenure of your loan as compared to a personal loan.

3. The tenures of the loan.
The tenure of the lending instrument you choose plays an important role in deciding just how easy to strenuous your repayment schedule will be. Longer tenures make for smaller EMI amounts and longer tenures make for better savings at the cost of much higher EMIs. However, with a long tenure, you can always cut short the tenure of the loan by making a prepayment as and when you are financially able to do so.

Therefore, it makes much more sense to go with a loan against property as it comes with tenures as long as 15 years. This is a good 60 months more than a most personal loan that comes with tenures of 10 years. The extra 60 months to repay the loan make it much easier to pay back the loan.

So there you have it, three major reasons why a loan against property makes much more sense than a personal loan when in urgent need of funds. If you are still doubtful, you should consult a financial expert to see which one is better suited for you.

 We hope this article will help you make a well-informed decision between the two.

Good luck and all the best!