Imagine you are urgently in need of some finances as you do not want to miss out on an opportunity to buy a home that you always dreamt of owning. No doubt, there are several financial products available, each of which claims to charge you the lowest interest rate. But, how do you know which one of these stands closest to your preference?
In case you find yourself struggling to get answers to the above question, it would be wise to opt for a product that offers the highest level of security, and ‘home loan against property’ is one great example. No matter if you intend to buy a new home or are in the mood of starting a business, a loan against property turns out to be a perfect choice for you. Moreover, you can also use it to fund children’s education, marriage or medical treatment.
What is Loan Against Property?
Loan against property is a financial product that lets you mortgage your house or a piece of land to avail the loan amount. One of the primary reasons as to why loan against property is highly preferred is because of the flexible repayment options available. Also, the interest rates charged are lower than other equivalent financial products. Above all, the loan also comes with various insurance and tax benefits.
Those residing in a cooperative society too can avail a loan against property. As an applicant, you will only be required to present to the loan provider a No Objective Certificate (NOC) from your society.
What is the procedure involved?
Once you apply for the loan, the lender will assess the net market value of the property, followed by your credit history check, based upon which your loan eligibility will be determined. Keep in mind the eligibility criteria would differ based on the policies and terms set by the lenders you approach. Generally, the age limit set by the lenders to avail the loan is between 18 to 60 years.
What documents should you keep at hand?
The lender will demand a certain number of document(s) to sanction the loan amount. As a salaried employee, you will be required to present your identity proof, a copy of Form 16 and salary pay slips that highlight the income of the past 6 months. Self-employed individuals also need to submit the IT returns details of the last 2 financial years, the identity card and the proof of income.
The loan offered is 65% of the market value of a residential property and 55% of the market value of a commercial property. While a standard personal loan comes with a short tenure of not more than 5 years, a loan against property can be paid over a period of 15 years.
Above all, a hassle-free application process is another reason why you should consider opting for a loan against property. With several loan lenders offering the best of schemes, you have a good number of options at hand. Make sure to compare a few of them, as one is sure to charge an interest rate slightly lower than the other.
Summary: A home loan against property is the best option when you are in urgent need of finances to buy a home, pay for the education expenses or other similar instances. The process is quick, risk-free and comes with a whole bunch of benefits solely based on your personal requirements.