Property Loan: Common Questions
There are many types of loans available in India to meet various needs. Business loans, loans against property, personal loans, gold loans, and loans against financial securities are just some of the options available. While each type of loan offers its own advantage, a loan against property is a good way to secure large sums at comparatively low rates of interest.
Benefits of Taking Loan Against Property
Personal loans and business loans are some of the choices you would want to explore when trying to deal with a cash crunch, depending on the situation. However, unlike unsecured business loans and personal loans, when you take out a loan by pledging your property, it provides you many advantages:
- You can get a larger amount as loan depending on the market value of your property.
- Generally, loan against property interest rates are much cheaper than those charged for other types of loans.
- Property loans also give you the option of choosing a longer tenure to repay the loan.
- Cheaper interest rates and longer tenure translate to lower EMI, thus reducing the financial strain as you repay the loan. Bajaj Finserv offers you Loan Against Property with many exclusive benefits.
Factors Considered by the Lender While Processing Your Loan Application
- Loan application approval and the amount you get as loan depends on various factors. This includes your monthly income and your liabilities. The Debt To Income ratio is a key factor in determining whether you are capable of meeting your obligations if the loan is granted to you. Bajaj Finserv explains the concept of DTI clearly, and also shows why it is important.
- The current market value of the property you are offering as security is determined first. The amount sanctioned will be a percentage of this value.
- The lender also studies your past track record in repaying loans, your credit score, the stability of your current position if you are salaried, or the stability of your business if you are self-employed.
- Your savings, and the total value of your reported assets are also considered.
If you clear all these steps, the company will then determine the amount, tenure and the interest rates offered, again depending on all the above factors. Here’s how you can clear the income verification test.
Documents Needed for Loan Application
- You should provide proof of ownership of property. If the property that you are using as security has other owners besides you, they should also be joint applicants for the loan.
- You should also provide ID proof, residence proof, salary slips, Form 16, and bank statements for the past 6 months
- If you are a self-employed professional or a businessman, you need to provide educational certificates, proof of business, profit and loss statements and balance sheets for the last 3 years.
To get an idea of all the formalities and documentation requirements, look at the eligibility criteria page on the finance company’s website. If you have more questions, go through these property loan FAQs.
Taking a loan against property is easier now with online processing of loans. Study the interest rates and other features of loan offers, and choose the one that fits you best. Apply online for a loan against property and get the required funds quickly.