Are you in need of funds? Then you should definitely look for a loan against property, which is a form of a secured loan, taken against self-owned property. You can receive a loan amount of about 70% of the existing property’s market value and use the funds to pay for any expenses. It acts like an unsecured loan and has no restriction on its end-purpose.
Below are 5 things to consider before you apply for a property loan.
Understand the Eligibility Criteria
You should check for the loan against property eligibility criteria by different loan providers, compare those, and select the one that you match the best. Usually, as an applicant, you must be over 25 years of age, drawing a regular monthly income, a national resident, having your own property and bank account, a disciplined taxpayer etc. You should also have the necessary documents in place ready for submission, such as income proof, property papers, income tax return proof etc.
Loan Available on Different Property Types
A property loan can be taken on property that is residential, commercial, or industrial. The banks and NBFCs do not discriminate on providing funds on the basis of property type. However, the property must not have any pertaining legal issues. It should be in good condition and of a significant value.
Calculate the Property’s Value
The property you own, it’s value will vary based on the locality it is situated in, it’s age, size/area of the same, and amenities included, along with the brand (builder’s reputation) etc. The loan amount sanctioned will depend on the total value of the property. A property that is of high value and located in a good locality will generate higher chances of loan approval and sanction of the desired loan amount, as the financial institution will consider the property and lending, a low-risk one.
Flexible Tenure and Affordable EMIs
The tenure of property loans ranges between 5 years and 15 years. Thus, if you want to sell only a small amount from pockets every month towards loan repayment, you can choose a longer tenure, and vice-versa. Basically, the flexibility of loan period helps you to manage finances easily without stressing your bank balance. You can pay an affordable EMI as per income and requirement.
Compare Offers and Interest Rates
Not every offer of property loan will be the same. Some may differ in terms of tenure, fees, charges, and interest rates. As a secured loan, the overhead charges and rates of interest are usually lower (9% to 16%) than unsecured loans. You should compare all the schemes offered by leading banks and NBFCs, benefits, repayment conditions, look at the rates offered, before deciding on one. Use free financial tools (loan EMI and eligibility calculator) available on the website of the financial institution to get an instant quote on the loan and the estimate EMI to pay, so that you can take an informed decision.
Consider the above-given details for informational purpose and know more about loan against property and its different offers and schemes by contacting legit providers for the same.