Loan against property is one the popular borrowing tools that is preferred by individuals and SMEs alike. It is amongst the fastest growing credit products in India. CRISIL forecasts that the total credit under loan against property will grow to Rs. 5 Lakh Crore by 2019. The number indicates an overall annual growth of 22% over 4 years.
One of the reasons for this growth is the win-win condition that mortgage loan offers. With this credit product, a borrower can leverage an idle property for his/her long term business or personal needs. On the other hand, its secured nature reduces the stakes on the lender’s side.
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One can fulfil multiple purposes with a loan against property, like
- To fund a child’s education abroad
- Handling an unforeseen medical expense
- To gather funds for marriage
- Home renovation or reconstruction
- Undertake a business expansion project
There are multiple features which make a Loan Against Property from reputed NBFCs like Bajaj Finserv an affordable option compared to other financial products.
Let’s look at the features responsible for a loan against property affordability and convenience.
Loan Against Property – Features That Make It An Affordable Option
A. High Chances Of Approval
A secured loan is always quickly approved by the lender. So, when a borrower applies for a loan against property, he/she has a high chance of getting the loan approved. A borrower must present the appropriate documents proving his/her ownership details on the collateral property. Loan against property eligibility is pretty straightforward and easy to meet.
B. High-value Loan
With a loan against property, a borrower can avail a significantly higher loan amount. The loan amount can go up to Rs. 5 Crore depending on the LTV. Several NBFCs offers an LTV as high as 80%, depending upon the borrower’s credibility.
C. Flexibility In The Utilisation Of The Sum Amount
A loan against property in India is fairly unrestricted on its usage. One can use it for practically any purpose. Additionally, knowledge of why a loan against property to consolidate all your existing debts can be advantageous.
D. Low Interest Rate Along With Long Tenure
A loan against property charges low-interest rates compared to most other advances. It is because these are secured loans where the lender can use the collateral to gain back the outstanding debts in case of a default. Interest rates as low as 9.25% are available with a loan against property. Additionally, long tenure of up to 20 years lowers the overall EMI significantly. Thus, loan against property is a stress-free way to fund all your life transforming plans. A loan against property EMI calculator enables the borrower to check the tenure easily and stay up to date with EMI payments.
E. Option To Borrow Against Multiple Properties
A borrower can avail a loan against property with a residential as well as a commercial property. It’s also possible to avail this loan against the mortgage of multiple properties under construction or even against a land.
If you are a property owner, then you need a proof of ownership as one of the loans against property documents required. Furnish all property documents, KYC and income proof to avail a loan against property without hassles.
What To Look For In A Loan Against Property?
You must keep in mind a few parameters before you choose a lender for loan against property. A flexible tenure that allows you to fully or partly prepay anytime at minimal charges is essential. It will allow you the independence to prepay the loan amount whenever you have some additional funds at hand.
The Flexi Hybrid facility offered by Bajaj Finserv is another feature to look for. It will enable the borrower to withdraw a portion of the approved loan and pay interest only on that utilised sum. Principal repayments, in this case, can be done at the end of the tenure. The facility will supposedly reduce EMIs by up to 45%.
Additionally, look for pre-approved offers which make the procedure to take a loan more simplified and less time taking. Pre-approved offers can be availed on home loans, business loans, personal loans and a range of other financial products.
Lastly, use a loan against property EMI calculator to know your EMI amount and decide on the loan amount and the tenure you are comfortable with.