Understanding the Benefits of Home Loan against Property
Loan against property is one of the best ways to obtain funds by keeping your residential, commercial or alternate property as security with the lender. It is a type of secured loan in which the right of ownership will remain with you but if you are not able to repay the loan amount, the property can be sold off for paying the debt.
How much you can obtain as home loan against property varies from one bank to another. However, you can easily get a loan amount of 2-100 lacs INR. Several factors like your income, property valuation and repayment capacity will be considered by the bank or lending institution to decide the amount you will be granted.
As far as commercial properties are concerned, the maximum loan amount can come up to 80-100% of the property value whereas, for residential properties you can get up to 80%. So, based on the valuation of your property, you can expect a certain loan amount.
This type of loan is perfect for self-employed people or for people who wish to expand their business. Self-employed people can get this loan at a cheap interest rate. You can also obtain it for personal purposes such as home renovation, marriage or higher studies of children. You can get loan against property at reasonable interest rates compared to a personal loan. Interest rate can range between 10% and 16% per annum. This loan mainly features fixed or floating interest rates.
Your eligibility for a loan against property depends on the value of your residential or commercial property. It can either be 10 lacs or even 50 lacs. The eligibility amount increases if your property value is high.
Not just a commercial or residential unit but this loan can also be obtained on a plot. You don’t have to be necessarily using the property on your own. It can also be rented to someone and you can still apply for this loan. However, the only requisite is that the property should be in your name with a clear title. There are few banks that don’t accept properties that are on lease or based on power of attorney.
Remember, the government registration value of your property will not be considered by the bank when lending you money. The bank will be considering the market value of your property. You can get a loan up to 70% of the property’s market value. Also the maximum tenure for which you can get the loan is 15 years. You will have to provide security, guarantors or collateral for obtaining a loan against property. Be prepared to go through a long verification process in order to obtain the funds.
Credit score plays a big role in granting the loan whether you apply for loan against property or an overdraft loan. So, before you approach a bank, make sure your credit score is good. Also, keep your income statement and other important documents ready when applying for the loan.
How much you can obtain as home loan against property varies from one bank to another. However, you can easily get a loan amount of 2-100 lacs INR. Several factors like your income, property valuation and repayment capacity will be considered by the bank or lending institution to decide the amount you will be granted.
As far as commercial properties are concerned, the maximum loan amount can come up to 80-100% of the property value whereas, for residential properties you can get up to 80%. So, based on the valuation of your property, you can expect a certain loan amount.
This type of loan is perfect for self-employed people or for people who wish to expand their business. Self-employed people can get this loan at a cheap interest rate. You can also obtain it for personal purposes such as home renovation, marriage or higher studies of children. You can get loan against property at reasonable interest rates compared to a personal loan. Interest rate can range between 10% and 16% per annum. This loan mainly features fixed or floating interest rates.
Your eligibility for a loan against property depends on the value of your residential or commercial property. It can either be 10 lacs or even 50 lacs. The eligibility amount increases if your property value is high.
Not just a commercial or residential unit but this loan can also be obtained on a plot. You don’t have to be necessarily using the property on your own. It can also be rented to someone and you can still apply for this loan. However, the only requisite is that the property should be in your name with a clear title. There are few banks that don’t accept properties that are on lease or based on power of attorney.
Remember, the government registration value of your property will not be considered by the bank when lending you money. The bank will be considering the market value of your property. You can get a loan up to 70% of the property’s market value. Also the maximum tenure for which you can get the loan is 15 years. You will have to provide security, guarantors or collateral for obtaining a loan against property. Be prepared to go through a long verification process in order to obtain the funds.
Credit score plays a big role in granting the loan whether you apply for loan against property or an overdraft loan. So, before you approach a bank, make sure your credit score is good. Also, keep your income statement and other important documents ready when applying for the loan.
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