Guide for Beginners for Loan Against Property

Provided by the banks and finance companies, a loan against property is given against any property, either residential or commercial. It falls under the secured loan category wherein the security is your property, and the amount of the loan is also according to your property’s market value at that time. One of the benefits of loan against property is that it is given at a low-interest rate. You can avail the loan if you have a property or land that you can keep as security.

You should have all the necessary documents to avail a loan against property which are:

• Identity Proof
• Proofs of income, age, educational qualifications
• Documents showing ownership of the property being kept as security
• The last six-month bank statement

Beginners should also know the following things for Loan against Property:

• Loan Repayment:

To avail the loan, you will be required to fulfil the income criteria since the amount of the loan is not small. The tenure of the loan repayment varies from lender to lender.

• Property Valuation:

Before lending you the loan, the lender will check your property and based on the market value of that property; the amount will be decided.

• Ownership of Property:

The loan will be given if the lender is satisfied and clear that your property has marketing value. Moreover, co-owners, if any, should abide by the criteria and be a part of it.

• Tenure:

You get more time to repay the loan since the loan against property has a more extended repayment period. You can choose and divide the EMI over many years since it will reduce the burden on you and is at a lower interest rate.

• Repayment Capacity:

It will be calculated and checked by the lender through your income statement, ongoing loans if any and your history of repaying the loans.

Read More: Read These Six Factors That Determine Your Mortgage Interest Rate?