Loan against property is a loan that is securely provided by banks, NBFC for residential home, finance companies or commercial real estate. These loans are offer at a lower interest rate than personal or corporate loans. They are provided to anyone who owns a second-hand property eligible for such loans, whether they are paid or self-employed. The scale of approved loans is also more extensive than what other available options can provide.
What Are Some Of The Major Features Of Property Loan?
- High prepayment loans: According to the lender’s policy, you can borrow up to 60% of the market value of the relevant property. Or, you can take advantage of a relatively long payment period (up to 15 years) to ensure that monthly payments are within reach.
- The loan can be used for multiple purposes:The lender does not limit the use of the borrowed amount. It can be used for many purposes, from paying for upcoming wedding expenses to corporate financing and expansion plans. Apply for a business loan to pay for medical expenses or even purchase real estate or assets that are not eligible for credit in your capacity.
- Loans can be availed by all: Loans are for employees and self-employed, and entrepreneurs.
- Simple documenting process and simple processing: Real estate loans have minimal document requirements and quick repayment compared with other loans.
What Makes Property Loan So Important?
- Eligibility: In contrast to an unsecured loan, your current income determines the loan amount, while a housing loan is the present value of the property, and payment determines the allowable loan amount. In addition, your age and previous credit rating will also affect the loan amount and repayment period.
- Documents: In addition to the application form and proof of identity, address and income, you must also submit real estate appraisal documents. Make sure you provide the correct information, as the lender will verify all the information provided.
- Credit processing: After checking all the information and ensuring that you have fulfilled your repayment obligations, the lender will process your loan application. The lender will conduct a site visit to evaluate the property, and it will be used as a security deposit.
- Cost: higher than the interest rate, handling fee, stamp duty, etc., applicable to the loan, depending on the lender.
- Loan payment: the loan will be repaid after all procedures are completed, and the loan is approved. Depending on the size of the loan, the loan can be paid in one instalment or 2-3 instalments, which may or may not be paid in instalments.
- Returns: Generally speaking, the maximum period is 15 years. In addition, depending on the type of interest selected. And commercial refinancing, a prepayment fee may be charged by the lender.
- You can choose to transfer the loan from an existing lender to a new lender: This includes repaying existing loans early and applying for new loans from new lenders. Before choosing a loan transfer, calculate all the costs involved. Considering the advance payment and handling fees of the loan. And other costs of the new loan, the transfer of the loan should not generate any savings.
Concluding Thoughts
Loans against property are the assets of entrepreneurs and employees. Freelancers seeking to grow their business can take advantage of this opportunity. Expensive surgeries or sending children to foreign universities for higher education can help raise funds. Property loan can not only save costs but also provide cost-effective EMI for 15-20 years. The low-interest rates of such loans can reduce the burden of repayment. All these and other benefits will help business development or ensure the financial future of loan applicants and their families. A secured housing loan is a loan that must have a legitimate purpose.
Learn more about loans and finance from the official website of HeroFinCorp.
