A loan against property helps to meet high-ticket personal and professional needs with convenience. There are various types of loan against property solutions available in India. Most financial institutions offer tailor-made loan solutions to help meet the unique needs of all borrowers.
The Major Benefits of a Loan against Property
The major benefits of a loan against property are as follows:
- Low loan against property interest rates
- Low processing fee
- Zero hidden charge
- Zero pre-payment penalties
- Interest on reducing loan balance
Loan Against Property Eligibility
To be eligible for a loan against property, the following are essential:
Minimum Age: 18 years
Maximum Age: 70 years
Resident Type: Resident Indian
Loan Tenor: Up to 15 years
Types of Loan Against Property Available in India
The following are the most common types of loan against property available in India:
Loan against property for education
A borrower can use a loan against property for purposes related to higher education. The loan is especially beneficial for students who are pursuing higher education overseas or in India. Some of the major advantages include minimal documentation, hassle-free and quick disbursal, and loan repayment tenors.
Loan against property for renovation
From installing the latest lighting fixture introduced in the market or fancy kitchen cabinets, existing homeowners can make the best use of a loan against property to renovate their home.
Loan against a residential or commercial property
A borrower can avail of a secured residential or commercial property loan for funding any monetary requirements. In such a case, the borrower has to mortgage their property as collateral to avail of the desired loan amount. The sanction is also, however, based on the current market value of the pledged property.
Loan against property for wedding
Being a once-in-a-lifetime event, most Indians do not mind splurging. A typical wedding in India can go up to some lakhs. Even though financial prudence calls for consistent savings to build the desired budget to fund a dream wedding, the trend of financing funds by availing a loan against property is rising. Factors that affect eligibility for a loan against property used for marriage include work experience, age, salary, and also types of property. Borrowers can check their eligibility for a loan against property online by using an eligibility calculator. By doing so, a borrower can save time and effort.
Loan against property for debt consolidation
Consolidating multiple loans is always a smart move. A loan against property can be used for debt consolidation. This secured loan allows borrowers to consolidate several existing debts and also avoid penalties from any pending dues. As a result, a borrower can save up on EMIs. On meeting the eligibility criteria and providing the required documents, a borrower can expect speedy approval followed by swift disbursal.
Loan Against Property by Professions
- Loan against Property for Doctors
Doctors can avail of a secured loan against property to finance their immediate funding needs. They can use the loan amount to equip their nursing home, expand a clinic, or refinance their existing housing loan in India. Some of the major benefits of such a loan include facilities like the following: quick disbursal, flexible repayment policy, favorable loan tenors, high loan sanction, and personalized insurance schemes.
- Loan against Property for Chartered Accountants
Chartered accountants can avail of a loan against property for business and personal purposes, including funding a wedding, expanding their business, paying for a medical emergency, and so on. The end-use of a loan against the property must not be for any prohibitive or speculative activity. The eligibility of loan against property for chartered accountants is calculated based on the borrower’s repayment capacity.
In this context, it is also worth knowing about a reverse mortgage, which is a relatively new concept in India. It has been launched for senior citizens. Many senior citizens do not have a steady and adequate monthly income. However, many possess property in some form. So they can opt for a reverse mortgage. A reverse mortgage is the opposite of a mortgage loan. One availing it has to pledge the property as a mortgage with the lending institution, such as a bank or an NBFC. The lender will pay them a steady amount of income each month in the form of EMIs. When the senior citizen passes away, the bank or NBFC can sell off the property. The loan amount that is paid to the senior citizens is deducted from the amount in which the real estate is sold. The residual amount is returned to the legal heirs of the deceased individual.
The Final Word
Financial experts recommend that a borrower must always try to avoid over-leveraging. Otherwise, it may lead to a default. The borrower can end up losing the property against which they have availed of the loan against property. If the property that has been pledged as collateral is disputed, chances are that the loan may be denied.