How to make use of Loan against Property to one?s benefit.

Posted by Anurag Mishra on May 9th, 2017

Purchasing a home is a pointer of our monetary stability. Experts consider that the case of buying a house tops up restrict the buyer’s monetary capability. Though, very hardly any experts say that the home can be utilized in a shrewd manner. This blog post tries to shack light on how you can use your home to attain your preferred financial goals.

Loan against Property

Loan against Property (LOAN AGAINST PROPERTY) can be defined as a form of secured loan received from a bank or a financial institution by mortgaging one’s accessible property. Loan against Property can be used for meeting necessities for, such as introducing a new business venture, its growth, pursuing higher education, medical expenses, working capital necessities etc.

Loan against Property, which can be practiced independently or jointly with extra persons or legal entity, can be taken as term loan with fixed EMI or as an overdraft facility. As an OD, Loan against home gives the much needed suppleness by serving meet the varying necessities of capital in a business. While Loan against home has no upper cap on the sum of the loan to be applied, the amount is ascertained by the banks as per the market value of property and reimbursement capability of the applicant. The loan to value ratio usually tends to differ from 45-90% of the property’s market value and can be availed against residential, industrial and commercial property counting a warehouse or a land parcel.

We will explain how one can benefit a Loan against Property

Eligibility:   Eligibility for the loan is decided on criteria such as age, income, etc. The eligibility can be ascertained by checking the same or by visiting the bank’s website.

Choose the right lender    : One can decide one’s lender by comparing fundamental parameters like interest rates, application fees, processing fees and legal charges of different banks.

Application: On selecting the lender, the applicant has to fill the application form providing information about financial assets and liabilities; property details and other personal and professional details.

Documentation: Loan against home applicants are mainly for the self-employed section and essential documents is wanted for income assessed.

Checking CIBIL score: The credit history of the applicant is checked through CIBIL score. The CIBIL score goes an extensive way in whether the customer receives the loan or not.

Technical and Legal clearance: Before approving the loan, the property documents are officially genuine as the same act as the safety against the loan. Second is the assessment of the property decides the loan amount to be given as security?

Subject of Sanction letter: After the credit assessment, the sanction letter is issued to borrower giving facts like loan tenure, repayment options and rate of interest which has to be duly established and sent back to the lender.

Disbursal: At the end of all the above events, the loan amount is disbursed with the pledge that the similarities will be repaid within a set timeframe. Businesses can make use of this loan instrument to make the most of their respective business ventures.


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Anurag Mishra

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Anurag Mishra
Joined: December 13th, 2016
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