Loan against property also referred to as the mortgage loan is different from a home loan. Herein, the borrower keeps any of his property as collateral and seeks a loan against it. The property in question can either be commercial, residential or industrial. Though the lenders don’t hold many jurisdictions in how the borrower will use the loan amount, still the latter is required to mention the end use of the loan in the application form. One cannot use this loan for the purpose of home renovation, home expansion of purchase of any property. The applicant can use the loan amount to meet his financial emergencies pertaining to medical, business, education or travel. The rate of interest offered by different lenders varies and so does the eligibility criteria.
Loan Against Property can be availed by both the salaried individuals and self-employed professions and non-professionals.
ELIGIBILITY CRITERIA FOR LOAN AGAINST PROPERTY
- Age: The applicant must be aged between 21 years to 65 years.
- Loan Tenure: The loan can be availed for up to 15 years
- Net monthly income: Minimum monthly salary of Rs. 40000 is required for salaried individuals while self-employed individuals must earn at least Rs.3 lakh annually.
- Employment type: A minimum work experience of 3 years is required for salaried individuals. Self-employed individuals must have a minimum business existence of 5 years and filed and computed ITR of 3 years.
- Interest rates: It varies between 8.80% to 15.15% per annum
- CIBIL Score: A CIBIL score of 650 and above is acceptable for availing loan against property.
DOCUMENTS REQUIRED FOR LOAN AGAINST PROPERTY
- Duly filled application form with correct information
- Proof of Identity
- Proof of Address
- Form 16
- Last 2-year ITR
- Bank statement of last 6 months
- Salary slip of last 6 months for salaried.
DIFFERENT TYPES OF LOAN AGAINST PROPERTY
The loan against property is of two types viz.
- Regular Loan Against Property
This is the most common loan product which is procured either against a residential or industrial property. One can use the borrowed amount to take care of their business or personal expenses.
- Loan Against Property Overdraft
Similar to overdraft loan, a loan against property overdraft encompasses depositing surplus amount in the loan account to reduce the interest liability. This is a great option for businessmen availing this loan who have an inconsistent flow of income.
AVAILING LOAN AGAINST PROPERTY FROM LOANSJAGAT
Since different lenders have different terms and offerings, it can be very difficult to choose the lender with the best deal. LoansJagat is the one-stop platform for availing the best offers on loans against property as it has partnerships with over 40 key lenders including banks and NBFCs under one roof. One can easily compare different lenders on account of their offerings such as rate of interest, loan amount, loan tenure, processing charges, terms and conditions etc and make an informed choice on the basis of this. Not only is the online portal convenient and easy to access, but even the processing is also transparent, which is like a cherry on the cake in today’s lending market where frauds are increasing at a fast pace.
STEP 1: Check for your eligibility and calculate the EMI
Checking for one’s eligibility is the most important step as failure to abide by the same can result in rejection of loan application. It is calculated on account of factors like age, income, type of property, LTV ratio, obligations etc. Calculating the EMI before you apply for the loan helps you determine the amount which you can repay back comfortably each month. One can use the EMI calculator to determine the EMI on the basis of one’s income and liabilities.
STEP 2: Check the property approval status along with legalities and documentation
The lender seeks all the property-related documents and hence one must procure records and clean titles against it. It must be remembered that it is easy to grab a low-interest rate on residential property than what is offered on commercial and industrial properties.
STEP 3: Choose the interest rates wisely
It is important to choose the interest rate offer wisely. You can either opt for a fixed or floating interest rate. Also, ask the lender if they have the option of overdraft.
STEP 4: Compare other related loan parameters
The actual cost of the loan is determined not just by the interest rate but other key parameters like processing fees, foreclosure charges and insurance premium. You can access the LoansJagat portal for comparing different lenders on account of these factors and make a well-calculated decision.
STEP 5: Choose a flexible lender with good customer service
Your association with the lender will going to be a long one and hence it is crucial to check them on the basis of their transparent processing and accessible customer service.