Loan against property is a secured loan which you can borrow by mortgaging your property. In this loan, you mortgage an immovable asset to the lender as collateral.
In case a person owns a residential or commercial property or land, a loan against property is the best option to fund all major expenses. Loan against property in India offers multiple perks and benefits. Nowadays, you can get up to 80% of the market value from financial institutions in the form of loan against property.
So let’s see why opting for loan against property is a smart choice.
Conditions where Loan Against Property is the Best Option:
- When you need to pay for emergencies- Emergency situations that require a significant amount of funds can arise anytime. Medical treatments and surgeries are often highly expensive. For most, it becomes impossible to gather the money for these expenses from personal savings. Apprehensions around a high EMI on personal loan further complicates the matter.
A loan against property becomes a life-saver in such situations. Along loan against property tenor of up to 20 years makes EMIs more affordable. Interest rates on loan against property are also relatively lower than unsecured types of loans. So, it’s quite easy to pay off the debts incurred through loan against property. You can check your monthly outflows towards the loan instantly using loan against property EMI calculator.
- When you want to utilize an idle property- If a borrower owns any additional real estate property not being used for commercial or residential purposes, it is profitable to avail a loan against property against the same. Availing such advances can be beneficial to meet your high-end expenses, particularly as the repayment terms are comfortable here.
Additionally, such advances are sanctioned against simple loan against property eligibility criteria. One does not mandatorily require a high credit score to avail a loan against property. Only providing the valid documents of the property that is to be mortgaged will do. Additional KYC and income proof documents of the borrower are also mandatory.
- When you need financing to pay off other expensive debts- It’s possible for a person to accumulate multiple debts on credit cards, personal loans, etc. All these types of credit products charge high-interest rates. A smart way to pay off all these debts and keep them from weighing you down is by debt consolidation.
A loan against property is quite helpful when you want to consolidate all your existing debts. With a loan against property, you can pre-close all other loans and get rid of paying multiple EMIs at elevated rates. Now, since a loan against property is a low-interest loan, it’s much easier to pay it off. A low-interest rate is one of the most attractive loans against property features.
- When you are confident about prepayment- When you pre-close or pre-pay a loan, you save a significant sum of money. It saves considerably on interests. Now, most lenders charge a pre-closure penalty on all types of loans.
So, evaluate your current financial condition and income capacity. After doing so, decide whether it is profitable to pre-close the existing loan with high interest. If you are confident, avail the necessary funds with a loan against property at a much lower rate of interest.
Also Read: Education Loan on Property
Who are Eligible for a Loan Against Property?
Anyone with ownership of some immovable property and with valid documents is eligible for a loan against property. Generally, Loan Against Property documents required by various NBFCs like Bajaj Finserv includes salary slips, bank account statements, PAN/Aadhaar card, and copy of the documents to be mortgaged.
Additionally, self-employed individuals qualify for larger amounts than the salaried ones. On the other hand, salaried individuals are eligible for a higher tenor.
Bajaj Finserv also makes the process to avail a loan easier, less complicated and faster with their pre-approved offers. These offers are available on a range of financial products like home loan, personal loan, business loan, etc. You can check your pre-approved offers with your name and contact number only.
So, availing a loan against property is an advantageous choice because of all these wide ranges of benefits.