1. Can I use the money obtained from Loan against property for business activities?
Yes. You can use the loan obtained by mortgaging your property for business activities as well as for any personal financial distress you might be facing. However, you are not allowed to use the money for any illegal or speculative activities.
2. Who is eligible for Loan against Property?
The Loan against property eligibility criteria vary from one bank to another. However, the common factors that all banks consider are:
Your income, savings, debt obligations
Cost/value of the property mortgaged
Your repayment track record for other loans, credit cards
3. Do I need a co-applicant for this loan?
A co-applicant for a loan against property is mandatory only when the property being mortgaged is owned by more than one person. In such a case, all co-owners of the property mandatorily become co-applicants.
4. What do you mean by the market value of a property?
The market value of a property is the estimated value in terms of money that a property can raise if it is sold at prevailing conditions.
5. What types of properties are accepted by lenders providing Loan against property?
Lenders accept various types of property they can be residential (rented out and self-occupied) or commercial use properties. A plot of land without any construction can also be considered as appropriate collateral by the prospective lender.
6. Are only residential properties eligible for a loan against property?
No, you can avail of a loan against the mortgage of residential/ commercial property owned by you.
7. For how long can I take a loan against property and what interest rate will I be charged?
The tenure of a loan against a property usually can be as long as 15 years, with interest rates typically ranging from 12% to 15.75%. The interest rate and tenure period on your loan may vary to a certain extent from one lender to another.
8. Can NRIs avail loans against the property?
Yes, several financial institutes offer loans against property to NRIs, subject to verification of all documents.
9. Do banks accept uninsured property to sanction loan against property?
No, in most cases, banks require the property to be insured before approving a loan.
10. Can I prepay my loan against property?
Yes, you can prepay the loan taken against the property; however, you would have to abide by certain terms & conditions levied on prepayment of loan by the particular bank.