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Loan Against Property

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    Loan Against Property Service

    A Loan against property is a type of loan which can be obtained for resolving various financial hurdles. The hurdles that come in front of companies in the business. So, this type of loan is a long-term-based loan. The security here is the equitable mortgage of the immovable property. Thus, a loan against property is the most secure type of loan for lending institutions. It is, so, the most easily available loan for the borrowers in normal circumstances.

    How to avail of Loan Against Property in India?

    Features and Benefits of Loan Against Property

    The beneficial features are basic and can be realized by the borrowers before they apply. This loan is the most suitable because the property is one strong form of collateral security. The property is mortgaged for various purposes of finance. So, the borrower avails loan in accordance with the property’s current market value.

    Here are a few common benefits of a Loan against property

    • Flexible loan tenure
    • Low-interest rate
    • Lesser hassles
    • Loan received as per the value of the mortgaged property

    Interest rates

    Interest rates depend upon the repayment schedule, EMI tenure etc. It ranges from 9%-15% depending on the lender, for a period ranging anywhere from 7 to 15 years.

    Advantages of Loan Against Property

    • Helps to build capital expenditure
    • Long tenure
    • convenient repayment
    • Minimizes risk for the bankers and minimizes your interest rate
    • Helps to build a capital-intensive business
    • Suit for multiple debt instruments – CC, OD, Term Loan

    Documents Required for Loan Against Property

    • Salary slips of the past few months in the case of employed individuals.
    • Bank statements of the past 3 months or depending on the conditions laid by the lending institution.
    • PAN card/Aadhaar card, or any appropriate identity proof.
    • Address proof.
    • Copies of documents of the property on which the loan is being taken with.
    • Income Tax returns.

    The process to avail of Loan Against Property

    FAQs

    LAP services have a huge significance in the financial outlook. There are certain factors that are to be considered for a Loan Against Property, or mortgage loan. So, it depends on the conduct of the financial institutions. They set their own guidelines, but most of the time; they are the same.

    The age of an applicant is an important eligibility factor. The financial firms keep the criteria from 18 to 70 years, or 25 to 65 years old. There are also criteria for salaries or minimum income. In most cases, work experience for salaried individuals is set at 3 years and above. For the business, stability should be present for the last 5 years. The CIBIL score must be good enough for the lending institution to speed up the process, and provide a hassle-free loan against property. Thus Personal, residential, commercial, and rented properties are all eligible to be mortgaged for this loan.

    Myths about loans against property.

    Based on the profile and requirements of the client:

    • Loan against commercial and residential properties

    Based on the current market value, borrowers can mortgage their residential or commercial properties to obtain the amount of loan, to support any type of financial requirement.

    • LAP for Self-employed individuals

    Self-employed individuals can obtain a loan against property, they can avail of a higher amount than regularly employed individuals, the specific amount varies from firm to firm. Thus, it requires to meet the property eligibility criteria.

    It is not a lengthy process, but a lot of documentation is involved in the same. Thus, we have prepared a step by step process to obtain a loan against property, as follows:

    1. Research and Analysis

    A study of the external and internal commercial environment is necessary before applying for such a loan. Thus, research helps the borrowers choose the right lending firm.

    2. Making an assessment of the limit of the amount

    Finding out the maximum amount of which the loan can be availed is necessary. It is based on the borrower’s requirements. Thus, the maximum amount obtained differs according to the profile of the borrower. Whether he is a salaried or a self-employed individual. Also, the market value of the property plays a critical role here.

    3. Checking the eligibility

    The borrower must meet the eligibility criteria, as set by the lending institution. So, it can be the type of property, the age of the applicant, etc.

    4. Making an application

    Understand the process of loan against property from the case study.