How to Get Loan Against Property? Here’s your guide

Wondering about how to get loan against property? Then you are at the right place! Many banks and non-banking financial companies or NBFCs are offering loan on residential or commercial properties nowadays, and these come with attractive interest rates and with long tenures. Naturally, your ease of repayment is now enhanced than ever before. Often, when you need a substantial sum of money for a wedding, or a crucial operation or even for growing your business, loan on property comes as a lifesaver. And usually the process of applying for one is quite simple. The lender will first evaluate you and your business and then the property you are offering as collateral. If all goes well and all documents are in place, you will receive your loan amount in no time.

What to remember

While you are busy understanding how to get loan against property, it is crucial that you remember the general terms and conditions of most lending institutions. Make the following checklist your friend before applying for the loan.
 
•  You can take this loan for any business-related or personal requirement except for speculative or prohibited activities.

•  The loan amount offered is usually not greater than 85% and will be decided based on your repayment ability. Your ability will depend on your age, income, assets, liabilities, qualification, number of dependants, savings history, and so on.

•  Co-applicants for this loan should ideally be all the co-owners of the mortgaged property. This might also boost the loan amount you are likely to get.

•  Repayments will be in the form of monthly EMIs that will begin from the month after the month in which the full loan amount is disbursed.

•  You will need to pay a pre-EMI interest if only a part of the loan amount has been disbursed.

•  You will need to submit the title deeds of the property which you are planning to mortgage. The deed should be perfectly understandable, marketable and devoid of any existing mortgage or litigation.

•  If you are planning to pay off the loan before schedule, make sure that you go through the terms of foreclosure.

•  It is also usually required to insure the property against fire or similar hazards during the period of tenure, and the proof of the same might be demanded by the lender too.

Eligibility criteria

Eligibility criteria might vary from one bank or NBFC to another. But some parameters are often similar. For example, your income, stability of occupation or business, and age will be surely considered before the loan approval. The fair market value of the property and any existing obligations will also be taken into consideration. Some lenders might require you to be a manufacturer, service provider or trader by profession. Others might only offer loans if the value of the property is greater than 50 lakhs. Properties which are above 50 years might not be eligible as security. You will also need to submit KYCs of all applicants and property papers before the loan processing starts.

Before signing the dotted line, remember to go through all terms and conditions and compare the loan structures being offered by more than two lenders.