If you own a property, you can make the most of it by using it for a loan. It is possible to hypothecate your property with the lender and get access to funds for personal or business purposes. One of the most common forms of borrowing in the country, the loan against property allows you to leverage the market value of the home to apply for funds. Several lenders in the country offer a low interest loan. However, it is advisable to compare loan against property rate of interest before you make the borrowing decision.
Once you decide to apply for the loan, you need to identify the purpose of borrowing and estimate the amount of funds you need. This step is very crucial in order to ensure that you do not underestimate or overestimate the amount of money you require. You can compare the eligibility criteria of different lenders online and then make the application. Most lenders have the below mentioned eligibility criteria:
- You must be aged between 25 years and 75 years.
- Your business should be in existence for at least 3 years.
- You must have a regular source of income.
- The loan amount will be based on the market value of the property.
It is important to remember that you cannot apply for a loan if you are a salaried individual. You must be self employed to be eligible for the loan. The tenure of the loan will range up to 15 years. In order to make the loan application, you must submit the application form and provide documents of identity proof, address proof and income proof. Additionally, you need to provide proof of business registration, bank statements, ITR, title deed of the property and income statement and balance sheet.
The lender will have a market valuer estimate the value of the property and the loan amount will be up to a maximum of 75% of the market value. It will also depend on the property type, your credit score and your profile. If all is in place, your loan application will be processed and approved in no time. It helps to choose a lender that offers low loan against property rate of interest. This will reduce the cost of borrowing and make it easier for you to repay the loan in time. You must remember to use the EMI calculator to get an insight into the EMI payable on the loan. All you need to provide is the loan amount and tenure to get an instant estimate. This will be helpful in making the right borrowing decision and you will be able to proceed with your loan application. The secured loan has low interest rate as the risk associated is low but if you fail to make timely payment of dues, you could end up losing your property to the lender. Hence, prepare a repayment schedule and ensure that the dues are always paid in time.