Loan against property is one of the common loans that are given to people by well-known banks and financial institutions. Loan against property is a loan given on the property by the market value of the property which can be around 40 to 60 %. The property can be residential or a commercial one. So why does one need a loan against property? There are several reasons and as everyone knows there can be times when the finances are quite strained, and a little financial help can help you get over the crises. Many times if the amount is small there are friends to help or even family members who can lend you the money, but when the amount is large, there can be issues as not all people can afford to give a huge amount and so many approach banks. One finds loan against property in India to be a better option in such cases.
Loan on property
People can use the house or office that belongs to them and is on their name to get an instant loan from the bank for various purposes. Property loans can be procured for various purposes and from any of the reputable banks. The banks will exercise due diligence of the property and appraise the value of the property and provide a loan of around 70% or more value as the loan. It is a form of a secured loan as you are offering collateral here and get a greater amount of loan as compared to the unsecured loan or a personal loan.
How to get a loan against property
There are certain factors that you should know before applying for the loan on the property. Some factors that might influence the loan on the property are the percentage of ownership of the property and the EMIs that you will pay and the age factor. You can check on the loan against property EMI calculator to know what exactly you will be offered and how you stand to gain. The EMI calculator helps to get you know the amount that you will have to pay to align with the interest rate and the loan tenure. It helps to compare loans of different banks according to their tenures and rates. Depending on the amount of the loan the bank can decide on the tenure. After assessing the property, the documents that you have regarding the property and the other details of the property including its condition. Banks can check and provide loans according to the present condition like if the property is rented out or has been vacant or is self-occupied. All this influences the loan offer and the percentage of the loan on such properties.
How good is property loan?
Yes, it is better to have a loan against the property as it is a cheaper option as compared to the personal loan which comes with higher interest rates. Here you have collateral to offer to the lending bank. It also helps to have negotiable loan tenure that can be increased based on the types of property you have. You can also get lower EMIs on property loan, as the interest rates are quite low. Besides, the loan approval procedure is faster as there is nothing much to check and verify and documentation as compared to the business loans, or personal loans or other types of loans. However, one has to check with the bank for different rules and benefits as they all work differently. One has to check the reputation of the bank and the interest rates along with tenures by comparing it with other banks before making a final decision.