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A loan against property comes with several advantages. For example, being a secured loan, you can get to access a substantial sum easily. Moreover, a loan against property in India is regarded as a reliable alternative to unsecured loans because you can flexibly borrow and repay funds, get the loan on a nominal interest rate, and apply for the loan with ease too.
What is a Loan Against Property?
The loan against property is a secured loan variant which allows you to pledge a high-value property in exchange for substantial funds to meet personal and/or business needs. This loan offering helps you obtain funds without having to sell your valuable asset. Also, with property as collateral, you can avail a greater amount when you choose this loan as compared to other loan types.
What kind of Properties can you Mortgage to take this Loan?
There is no restriction on the type of property that you can pledge to avail a loan against property. You can mortgage both residential as well as commercial properties to avail a sanction, provided the property is in your name. Once you approach the lender, they will evaluate the present value of the property alongside your repayment capacity to decide the loan amount that you can borrow. This means that if you pledge a high value property then getting a loan of up to 90% of the property value is also possible with this loan.
What are the Eligibility Criteria for the Loan?
Loan against property eligibility terms are easy to qualify for. Most lenders will allow you a sanction if you are a salaried or self-employed individual. For instance, if you avail a Loan Against Property from Bajaj Finserv, you must be between 33 and 58 years of age if you’re salaried, and if you’re self-employed, you must be between 25 and 70 years of age. Drawing a regular income and having a decent credit score is also important. Apart from this you will have to submit documents pertaining to the property you are planning to pledge as collateral as well KYC documents and financial documents to get a loan of up to Rs.3.5 crore. An easy way to check if you qualify is to use a loan against property eligibility calculator. Not only will you know if you qualify, but you will also be able to see the amount you can borrow.
What is the Repayment Term and Interest Rates for this Loan?
Since this loan is secured and of a high amount, you can make use of a long loan against property tenor to comfortably repay the borrowed sum. Besides, since you’re submitting collateral, the loan against property interest rates are lower too. Bajaj Finserv has a competitive interest rate as well as a tenor of up to 20 years that makes repayment easy. Moreover, if you avail the sanction with the Flexi Loan facility then you have the freedom to access your sanctioned loan as per your needs and pay interest only on the amount you utilise. This helps you meet unpredictable needs for finance without paying a high amount as interest. You can also choose to pay interest-only EMIs to manage your cash flow better.
Additional Read: Ways to Use Loan against Property for Repayment or Investing
Now, that you know basic loan against property features, here are some ways in which you can use it.
● Finance a family wedding
● Pay for your child’s higher education within the country or overseas
● Fund your dream vacation to a destination abroad or within India
● Fund expansion for your business
● Purchase a retirement home
● Pay for your spouse’s medical treatment or surgery
● Buy land or an asset in your name
● Buy commercial property to fuel growth for your business
● Carry out lease rent discounting