How loan against property can help you fulfil your dreams

Your property is one of your biggest assets. Property prices hardly ever go down drastically and one of the main advantages of owning property is that you can avail of a loan against property in your time of need. People can take loan against property to invest in their businesses, to provide for their children’s education or fulfil any other financial needs. Loan against property is preferred by many because this way you can get a higher loan amount with the benefit of lower EMI.

Mortgage loan interest rates are also low and they also have longer repayment options. This is because when you have a property listed as collateral your loan provider has greater assurance and hence they are willing to give you a higher amount as loan. Your loan amount cannot be higher than the value of your property though.

Taking a loan against property in case of emergencies is an age old practice. Mortgaging homes or properties for loans has been done even before banks existed. Even today property is said to be the best investment and people have often use their own homes as guarantees or as a mortgage.  Loan against property is preferred by many because this way you can get a higher loan amount with the benefit of lower EMI. Mortgage loan interest rates are also low and they also have longer repayment options.

Recently, Crisil said in a note that the amount of loans taken against property is set to double to Rs.5 trillion by 2019 and it is expected that the number will grow by 22% annually in the next four years. There are also emerging signs of a build-up in risk as competition intensifies, Crisil noted.

Usually people prefer to take a personal loan when they need small amounts of money, like to buy a car or to fund the education of a child. But personal loan interest rates are way higher than those of loan against property. This is because in a personal loan you do not have collateral with the bank. The difference between the interest rates can rage anywhere from 4% to 5%, which can mean a lot of savings. The tenure for a loan against property is also much longer than that of a personal loan. Personal loans are offered for a period of less than 5 years whereas loan against properties are high-value secured loans that can be paid off in up to 10 to 15 years.

Hence, a loan against property is your best choice if you want to take a loan. Not only can you get a higher loan amount you can also get a longer tenure to pay it off.