If you are in need of quick and urgent funding, you might be looking for external sources of finance. However, you can now use your own property and raise funds on the same. A property can be a huge asset when it comes to getting loans. Your personal and business requirement can be met with a loan against your property. It is a loan option that will allow you to take care of your financial needs instead of letting your property sit as a dead asset. You can easily tap into the unused value of the same to obtain quick and swift funding.
Eligibility:
The eligibility criterion is the minimum age requirement of 25 years with a consistent business or employment and the valuation of property should be above 50 lacs. Salaried individuals, traders, manufacturers and service providers can apply for the loan. The property should be less than 50 years in age. The documentation required for the loan application include proof of identity, proof of income, proof of residence and valid property documents.
Procedure:
Once you make a loan application with the financial institution, they will appoint a valuer to determine the market value of your property. Based on the current market value, the loan amount will be sanctioned and this could range between 40% to 60% of the value of the property. If the value of the property is higher, the loan amount sanctioned will also be high. Hence, if you are looking for a large loan amount, you could hypothecate a property that has a significantly high value.
Features:
- One of the biggest features is the high loan amount. The loan amount sanctionedcan be as high as 60% of the value of your property.
- The repayment tenure of the loan can range between 5 to 7 years depending on the loan and the property hypothecated. This means you can enjoy the loan for a longer duration and pay EMIs on the same.
- The loan has an option of prepayment which allows you to prepay the loan before its tenure so as to save up on the amount of interest. If you have excess funds in hand, you could choose to prepay the loan and become debt free sooner than stipulated.
- The loan is flexible and the tenure can be based on the EMIs payable by the applicant.
- One of the most important features of the loan is the need to pay the EMIs on time. If you default in the payment of your EMIs, the financial institution can gain possession of the property after giving you a notice on the same. You will end up losing your property to the financial institution in case of consistent default.
Weigh the options available in the market and choose the best loan against property in India. You can achieve your personal and business goals with a loan against your property. Make the most of your idle property and grow your business.