All about Loan Against Property
Even if you are a cautious saver, there may be times when you need financial assistance to tide over all of the unexpected urgencies. Many of you may prefer to avail money from your friends and relatives, but it may not be a good idea to strain their finances. A better option is to use your own asset i.e. house to take financial asset against it.
Features of Loan Against Property:
A Loan in which you pledge your house to the bank to avail loan is known as Loan Against Property. It is a secured loan where you can get a higher amount at least 80 – 90 % of your asset value.
It is cheaper than a Personal Loan as it is secured loan and hence the interest rate is very less as compared to unsecured Loan. It is a loan with maximum tenure, and personal debt is a loan with shorter loan period.
Flexible Loan Tenure Period:
The loan tenure for such loan typically varies from 1to 9 years, but banks can extend up to 15-20 years. It is a secured loan and hence the Interest Rate is very less. Longer tenure period offers a person an advantage for easy repayment of the whole loan amount without affecting much on your personal budget.
Process of Loan Against Property:
Loan Against Property can be taken on behalf of some residential or commercial property. It is a secured loan taken against any freehold property such as a house or a plot of land. It is a loan with low Interest Rates as comapred to other loans.
When you approach the bank for taking this loan, bank will check the documents related to your property. Bank will ask for your residence proof such as electricity bill, ration card or telephone bill. Even you will also have to submit your identity proof such as passport, PAN card and Voter Card.
If you are a salaried person, you will have to submit last 6month bank statements. On the contrary, if you are a self employed individual you will have to submit a last 2 years 2 year financial investment.
Factors Determined by Bank:
While offering loan, bank evaluate different parameters of the person such as:
1. Working Profile
2. Age of the borrower.
3. Credit Score
An income proof of last 3 years is mandatory to Property Loan. Minimum Age for availing this loan is 24 Yrs and Maximum Age is 65 years.
The most important thing a bank evaluates is your credit score. If you have ever defaulted on your bill payments, you will not be eligible for availing this loan at any cost.
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