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Taking a loan is a common practice these days, but not everyone has enough assets or collateral to get a loan. This is where a loan against property can be helpful. It is a secured loan where the borrower can take a loan against their property, be it residential or commercial. This type of loan is considered to be one of the most affordable and accessible loan options. In this article, we will discuss the benefits, eligibility criteria, and the documents required for a loan against property.
The interest rates on a loan against property are comparatively lower than other loan options. This is because the loan is secured against the property, which lowers the risk for the lender.
The loan amount that can be availed through a loan against property is usually higher than other loans. It depends on the value of the property and can go up to 70% of the property’s value.
A loan against property comes with a longer repayment tenure, which can go up to 15-20 years. This means that the borrower can pay back the loan amount in smaller EMIs over a longer period.
A loan against property can be used for any purpose, be it personal or business. The borrower can use the loan amount to fund their child’s education, marriage, or start a new business.
The processing time for a loan against property is usually shorter than for other loans. This is because the lender has the property as collateral, which reduces the risk and processing time.
The borrower should be between 21-60 years of age.
The property should be owned by the borrower, and there should not be any legal disputes pending.
The value of the property should meet the lender’s requirements. The lender may send a valuator to assess the property’s value.
The borrower should have a stable income source to repay the loan amount. They need to provide income proof in the form of salary slips, bank statements, or ITRs.
Aadhaar Card, PAN Card, Passport, or Voter ID.
Aadhaar Card, Driving License, Passport, or Utility Bill.
Property papers, sale deeds, NOC from the society, and tax receipts.
Salary slips, bank statements, ITR, and business proof.
A loan against property is a secured loan option that offers several benefits like lower interest rates, high loan amount, longer repayment tenure, flexibility in end-use, and quick processing time. The borrower needs to meet certain eligibility criteria like age, property ownership, property valuation, and income proof. They also need to submit identity proof, address proof, property documents, and income proof to apply for the loan.