Guess what is the most common loan type? Yes, mortgage loans. You can take a loan by keeping your property as collateral. Since they are secured loans, you will not face any hassles in borrowing.
Are you taking a loan for the first time? Or you might not be aware of all the necessary details.
Do not worry. This article will walk you through everything you need to know about a loan against property.
Purpose of Loans Against Property
Loans against property can help both businesses and individuals to fulfill their financial requirements. You can use a mortgage loan to fund your higher education or marriage expenses. Moreover, you can also buy a property with it.
Businesses can take a loan against property to expand their operations. They can also use it for research and product development. In short, you can use a mortgage loan for any purpose.
Advantages Of Loans Against Property
Lower Interest Rates
They have secured loans. So, the interest rates are comparatively lower. That means your EMI amount will also be less. It will not dig that big a hole in your pocket. Moreover, you will be able to manage your finances efficiently.
Check the loan against the property interest rate before applying. Make sure you get the lowest one.
Longer Loan Tenure
These loans come with a longer tenure compared to others. You can get up to 15 years to repay the loan. That means your EMI amount will be less. Isn’t that great? You will not have to cut down on your necessary expenses.
Choose a repayment tenure according to your convenience.
Minimum Documents And Easy Approval
Unlike personal loans, you do not have to submit several documents. Lenders ask for minimum documents since it is a secured loan. Moreover, you do not have to wait for days to get the money. They will process it faster than other loans.
Evaluation Of The Property
After you apply for the home loan, the bank or NBFC will evaluate your plot or house. The lender will sanction only a part of the value of the property. You can expect to get around 60 % of the market price.
Make sure that the property is free from disputes. That will avoid unnecessary troubles and delays. Is the property jointly owned? In that case, both the owners should apply for the loan.
Interest Rate
Loan against property interest rate ranges from 9-15%. Do not forget to compare the rates offered by different lenders. It will help you get the best deal. You can get two types of interest rates- fixed and floating.
In the former, the rate remains fixed throughout the tenure. While flexible interest rates keep changing according to the market conditions.
Final Word
Well, a mortgage loan might be an excellent way to raise money for your needs. However, if you fail to repay it, the lender can seize your property. So, make sure you repay your loan on time.
PNB Housing offers lap loans at affordable rates to help meet your financial requirements. Why don’t you check out their website?
