June 24, 2024


Mad about real estate

Property loan, its Advantages and Eligibility Criteria

Owning a Property is one of the most important assets for any individual as it not only provides a good investment option but also can be used during a time of emergency or in times of any trouble that a person might face. Thus many people opt taking Property loan as it provides them with a financial backing and support in critical situations whether it is needed for a wedding, medical emergency, higher education, business expansion or any other need.

Loan against property (LAP) or property loan refers to a loan which an individual avails by mortgaging the loan against his or her property from a bank, private finance firms or any financial institution. A LAP is taken against a residential home or a commercial property. The banks and private finance firms extend approximately 40 to 70 percent of the properties market value to the borrower.

Any individual either salaried or self-employed can avail the loan against property. Banks and many other private financial companies and firms offer loan against property to individuals at a lower rate of interest of about 10-12 percent and provide easy and hassle free loan with speedy approvals. Private financial companies offer larger amount against property as compared to the personal loans which provide a loan up to 3-5 lakhs. Apart from this, the EMI’s that the borrower has to pay is comparatively low in case of property loan.

Since a property is kept against the loan amount it is a secured loan and thus does not take much time for processing and approval as the property is already present. Any individual availing loan always has a fear of its repayment but unlike other loans, as there are lower EMI’s and a long repayment tenure he does not has to worry about it. Banks and the private financial firms provide longer repayment tenure of about 15 years and also offer flexible repayment options to the borrower. Thus the stress of repayment is less against property loan as compared to any other loans except the home loans.

A Lap is granted based on the following eligibility criteria:

1)         The value of the property kept as a mortgage

2)         The repayment capacity of the individual

3)         The assets he or she holds

4)         Liabilities

5)         Age of the individual who wants to avail the loan

For availing the loan an individual has to submit the documents required by the banks or financial institutions which include the photo identity proof and residence and the KYC documents which can be a valid passport, voter ID, Adhar card, valid driving license etc., the proof of income like the last 3 months salary slips, last 6 months bank statements and other property related documents like the title deed, approved plan etc.

Thus for an individual who is looking for large funds in a short time span, then he can definitely consider availing a property loan as the best option for him as it has faster processing, approvals, lower EMI, secured loan, larger repayment tenure and he can even avail a top up on the existing loan if the value of his mortgaged property rises during the loan tenure.

They charge a processing fee of about 1.25{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} with varied repayment options like Step up Repayment Facility where the loan amount is linked to the expected growth in your salary and benefits you in such way that you can avail a higher Home loan amount and pa low EMI’S initially, flexible loan installment plans offer you to pay according to your repaying capacity which may alter during the term of loan payment, Tranche based EMI offers you to pay only the interest amount till the final disbursement of the loan and the EMI, Accelerated Repayment Scheme gives the flexibility to increase the EMI’s in proportion to your income and the Telescopic Repayment Option gives you the longer tenure of 30 years!

The loan would require a security in the form of collateral or interim security as may be required by HDFC. They provide with both online as well as offline options of availing a loan as per the convenience, a customer has to choose accordingly. An added advantage of these banks is that they have an integrated network of branches so a customer can avail the loan and services from anywhere in India. You can now purchase a flat, row house, bungalow or any property that you want now with these easy Home loan options provided by the banks and built your dream house without worry!