There are various benefits of loans against property and loans option provided by the bank, one such popular loan is Loan Against Property. As it is preferable because it generally allows the borrower to borrow a relatively large amount. It has easy documentation flexible repayment options and speedy approval.
- The borrower can apply for a loan by putting his property as collateral or security.
- However, the mortgage only involves the transfer of interest and ownership of the property.
- Loan Against Property is popular because the higher loan amount is generally for the long term.
- Also, it has a lower rate of interest in comparison to other loans.
- Bank accepts both residential and commercial properties for the Loan Against Property.
- While taking the loan against property lender should consider
Benefits of Loan Against Property
Easy to get
- Loan Against Property is a secured loan, so it is easy to get the loan against property. However, banks are also more willing to provide this loan instead of an unsecured loan.
- The borrower does not face any kind of problem to take the unsecured loan.
- Loan against property is generally available for a longer tenure
- Loan against property can be extended up to 15 years
Lower interest rate
- As the loa id the secured loan so it provides lower interest rates as compared to a personal loan
- The rate of interest is generally between 12% to 15% where on the other hand the rate of interest of the personal loans is between 15% to 25%.
- Prepayment charges depend on the bank and it is decided by the bank.
- However, the prepayment charges are lower in comparison to the other loan.
- Some banks even do not take any prepayment charges on loans against property.
- The longer the tenure will be, the lower will be the EMI.
- Loan against property is for longer tenure so the EMI will be lower.
What kind of property be mortgaged?
- Self-occupied house
- Rented residential property
- Piece of land
Points to keep in mind while taking the loan against property
- The property should be owned by the borrower
- The title of the property should be clean and free from any kind of dispute.
- The property should not be subject to any kind of mortgage.
Purpose of Loan Against Property
Loan Against Property is useful in many ways and there are many purposes of loan against property.
- It helps in collecting the funds for the education of a child
- Furthermore, it helps in funding for the medical emergency
- It is useful for the wedding your child
- The borrower can plan a dream vacation with the help of a loan against the property
- Loan against property helps create funds for the expansion of the business.