Why one should go for Loan Against Property in comparison with Other Loans?

What is Loan against Property?

Banks provides many types of loans and options to customer. One of the most popular types of loan is loan against property. It is a type of secured loan in which the borrower has to pledge in their property as collateral or security to the banks or the lenders for availing the funds. It is one of the best options to avail larger sum of money. If a person is in urgent need for cash funds and they have a property, then loan against the property is the most suitable option they can go for. Related Articles: Loan against Property-An overview

What are the key benefits of availing Loan against Property?

The key benefits of availing the loan against property are as followed-

1. Lower rate of interests or even discounted rate of interests.

2. One can avail larger amounts or funds with Loan against property.

3. Lower EMI options because the tenure period for repayment is longer.

4. The loan amount can be used for personal, professional or business needs.

5. It is a good tool for consolidation of existing debts.

6. The approval process for loan application is speedy.

7. The documentation work is easy.

8. One can avail loan on either residential as well on commercial property.

9. Flexible options for repayment of loan.

What are the factors that affect the loan amount in Loan against Property?

The funds extended by the bank to a borrower are based on a number of factors. These factors play a major role in approval of loan against property. One such factor is the market price or value of the property pledged as collateral by the applicant. The bank reserves the right to extend only 60 to 70% of funds on the total market value of the property to protect itself from any fluctuation that is cynical. It is to ensure that that the risks of non-recovery of the loan amount is reduced or minimized to a great extent.

What are the eligibility criteria for Loan against Property?

The eligibility standards for availing loans are different based on the type of loan and the institution where it is being availed from. The **eligibility criteria for loan against property in India** are as follows-

1. Good credit ratings or scores of the borrower.

2. Ownership on the property mortgaged or pledged as collateral.

3. Required age limit

4. Repayment capacity

What are the documents required for availing Loan against property?

The following documents are required by bank and other financial institutions for providing loan against property to the borrower or applicant-

1. Residence proof

2. Copies of latest bank statement

3. Salary slip or income slip of last six months in case the borrower is salaried or employed

4. Property papers

5. Identity proof

6. Certified copies of financial statements for last three years, in case the applicant is self-employed

Who should opt for Loan against Property?

Loan against property is a good option to be availed by those who are in need of urgent funds. People who need larger amounts can go for this option. Such type of loan can be used for education purpose or to buy new property or for business needs. All a person needs is ownership on a property.