What you need to know about a Loan Against Property
A loan against property is a loan that is given against the mortgage of property. The loan is provided at a certain percentage of your property’s market value, usually somewhere between 40% and 60%.
The loan against property interest rates make them more attractive than personal loans. If you were to take a personal loan, the interest rate would be 16% – 21%. Taking a loan against property means you pay interest at the rate of 11% to 14.50%. This difference is because your property is guaranteed against the loan. If you avail the services of Bajaj Finserv, you can get up to 3 months off on your EMI payments.
How the Bank Goes About It
The mortgage loan process includes the following:
If the property you mortgage has more than one owner, all of you will have to apply together to get the loan.
You can take a loan for any freehold property – from a plot of land to your house. It doesn’t matter if you’ve rented out the house or if you’re living in it. For more types of loans against property, avail Bajaj Finserv services, and you’ll get a wide range to choose from.
The bank checks all the documents related to the title of your property, like electricity and telephone bills, for residence proof. They also need identity proof like your passport, PAN card, or voter ID card. If you’re employed, they need your bank statements for the past 6 months, and if you’re self-employed, they require your financial statements for the past 2 years.
The minimum age at which you can borrow a loan is usually 24 years, and the maximum age for an employed person is 60, and a self-employed individual is 65.
The bank also reviews your CIBIL or credit score and goes through your payment track record. Keeping a good CIBIL score will increase your chances of getting your loan application approved. Based on all of this information, your bank will ascertain your capacity for repayment and provide you with the loan if they are satisfied.
Here’s Why You Should Take One
Now that you’ve understood how loan against property works, opting for one is great choice if you’re ever in need of money. Here’s why:
The tenure of an LAP (Loan Against Property) is longer than most other loans. You can get one for a maximum period of 10 years. Since their rate of interest is lower, and they have such a long repayment time, it’s a cheaper option than any other loan.
Just like any other loan, you can take a LAP without disclosing your motive for the loan. Like a home loan, partial prepayment as well as full prepayment is allowed with regard to LAPs. This prepayment is generally free from penalties. If you contact Bajaj Finserv, they can provide you with a loan of up to 21 crores on your property. Find out more on their loan against property FAQ.
The property continues to be under your ownership even after you receive the loan. In case you are unable to pay back the loan, you can sell your property and settle the debt. This will also help you procure additional funds.
If the value of your property increases, you can refinance it to increase the loan amount. So if you’re a businessman, it’s the an excellent option for you to expand your business.
The processing of an LAP is much faster than a house loan as the property already exists. You can also continue to live in your home while making use of the mortgage money.
Your asset does not lay idle, as its value is utilised by putting it to productive use.
As a general rule, be cautious while taking out a loan; it must be backed up by solid reasons and assurances that you can repay it. If you need money immediately, a loan against property is a simple way to procure quick, liquid cash.