Are you planning to avail of a loan against property?
The borrowers can opt for the loan against property to avail the liquid cash in hand by mortgaging the lenders’ documents. The borrowers need to submit the documents to the lender to help avail the liquid cash in hand. The borrower can use the funds to buy another property, renovation of the existing property, and expand the current business, marriage purpose, business purpose. Etc. The essential documents required for the loan against property are property documents with clear titles, employment proof, and government id proofs stating an individual’s identity; in case of self-employed, the borrower should have business registration proof, profit & loss statement of the account statement. The borrower can avail of the loans in case of the loans against property even in chance of not meeting the adequate criteria of availing loans against the income. The income criteria are not considered for the loan against property. The borrower has already kept the property documents mortgaged with the lender to obtain the liquid cash.
The borrower can avail the loans up to 60-70% of the total property value as liquid cash in hand while availing for the loan against property. The borrower can avail loans from any lending financial institution for satisfying the needs by helping liquid cash in hand by mortgaging the property documents. The loans being opted by an individual need to be paid on time delaying it can lead to a heavy penalty being charged to the borrower. Suppose the borrower defaults the installment for a longer duration than the deadline; in that case, the mortgaged property can be sealed to recover the banks’ bad debt loans. While the borrower repays the loan amount with the principal amount and the interest, the borrower can get back the property documents after the full & final settlement of the dues being paid to the bank. The maximum benefit can be taken by mortgaging the property by availing up to 70% of the property value as loans, and accordingly, the funds can be used for any purpose. The bank does not restrict the usage of the funds to any particular category. Thus the usage of the funds can also be done for multiple purposes, and thus loans can be availed accordingly. Getting loans approved against property is an easy task as there is a surety with the bank about the recovery of loans.
Ways in which benefits can be taken for the loan against property:
- Multiple-use of funds:
The funds available can be utilized for multiple purposes simultaneously; for example, if the loan against the property is taken for the purchase of the house, the extra funds remaining can be utilized for the renovation of the property. Or else, if the funds are availed for the travel purpose, then at the same time, the funds can be utilized for the purchase of electronic goods as well.
- Availing loans at lower interest rates:
The loans can be availed at lower interest rates by surveying the charges taken by the bank for the loan against the property. The loans can be availed in the range of 9-14% per annum. Ideally, a lender should be found in such that the one who charges the lowest interest rates.
- Repay early to save on interest repayment:
Paying early installments can help the borrower save money on interest repayment, and thus the money can be saved by the borrower. Thus it is always recommended that the borrower should save money by repaying the loans early.
- Continue usage of property:
While the property is being mortgaged to the bank, the owner can continue to stay in the property, or if it is an extra property owned by the borrower then, in that case, the borrower can continue to give the property on rent to the tenant and continue earning money from the property. Thus there are no restrictions on the usage of the property while the loans are going on.
According to the points mentioned above, the property owner, in spite of mortgaging the property, can do maximum utilization of loans. The borrower can avail of loans at the lowest interest rates by properly surveying the lender and saving money on interest repayment. The property documents can be taken back once the loan is being repaid.