Even if you’re thrifty, and periodically stash away a portion of your income, there may be times when you’re in need of large sums of money. For example, you may have to fund a wedding or pay for your child’s education, and your savings just can’t seem to cover the costs.
Instead of borrowing from your friends and family, why not leverage a valuable asset and raise the money that you need? This ‘valuable asset’ would be your home or property.
If you opt for a loan against property, the lender will inspect the property you’re offering as collateral. Using a property loan calculator , they’ll grant you a loan that’s approximately 40%-70% of the value of your property.
Keep Your Documents Ready
Before you approach a lender and mortgage your property, you’ll need to have all the necessary documents in place. This includes the title deed of your property and proof of residence like your electricity bill or telephone bill.
Banks will also require some identification, for which you’ll need to furnish documents like your voter ID card, passport, and PAN card. If you’re an employed individual, your bank statements for the last 6 months will be inspected. If you’re self-employed, on the other hand, you’ll need to provide financial statements pertaining to your business over the last two years.
Take Note of the Costs Involved
When you apply for a loan against property , banks generally charge a processing fee of approximately 0.5%-1.5% of the loan amount. Since this type of loan is secured, you’ll have the benefit of availing lower interest rates than those offered in an unsecured loan.
The interest rates may be fixed or floating, and the rates lie anywhere between 12% and 16%.
The repayment tenure of a loan against property is usually between 1 and 9 years, but can go up to 15 years based on the amount offered by the bank.
These are a few things that you need to keep in mind when applying for a loan against property. Another important point to remember is that if your property has more than one owner, all the owners must be joint applicants of the loan.
A loan against property is one of the simplest ways to raise money when you’re in need of a large amount of money. You can take a loan on any piece of property that you own, from a house to a piece of land. So use your assets wisely, and raise the necessary funds.
The Bank also checks your CIBIL or the score of credit and also review your payment track history. If you have a good score of CIBIL that mean you will gain the chances of getting approved loan application. With this all the information bank will check out your sufficiency for repayment and give you with a loan if they are gratified.
As a common rule, if you apply loan against properly, you must have solid reasons and promise that you can repay all amounts. If you required instantly money, a loan against property is a smooth way to procure quick, print money.