Loan Against Property – Reasons And AdvantagesPosted by Rudra Raghavan on August 26th, 2019 There are times in life when we need funds suddenly. While we can take out a loan, high interest rates can prove to be expensive. In such situations, if you own a property, you can procure funds easily at lower interest rates with flexible repayment tenures. All you need is to take on a loan against that property. Let’s look at the reasons and advantages of taking a loan against property in India. Reasons to take out the loan To fund medical emergencies: Most of us have medical insurance. But in many cases, your chosen hospital may not feature in the insurance provider’s network of hospitals. In such cases, you have to pay for the medical treatment from your savings and apply for a reimbursement of the expenses. However, if you have property, you can easily take out a loan against it and fund the medical procedure. You can simply take out a short duration loan against property and repay it when you receive the reimbursement. To expand your business: Businessmen who need funds to expand their business can also mortgage their existing property as collateral and raise funds. The sums can be used to open a new franchise of the business, set up office in another part of the city, or even pay salaries in times of crises. Lenders generally accept all kinds of properties as mortgage including residential and commercial properties. However, agricultural land is not accepted. To fund your children’s education abroad: If your children aspire to attend university abroad, you have to be prepared to spend several lakhs for the same. While an education loan is an option, lenders typically ask for collateral to protect their investment. As such, an education loan also serves as a mortgage loan against property in a way, and can help you raise the funds required to sponsor your children’s higher education abroad. To fund your children’s nuptials: The big fat Indian wedding is not just a concept; it is a reality of our times. Wedding functions in India are elaborate and last a few days. Expenses can get out of hand. The cost of jewellery, wedding trousseau, event planners, venue, caterers, décor etc. can add to the expenses. In such a case, you can choose to mortgage your property and fund the wedding. The advantages After having examined the reasons, let us now take a look at the advantages of taking out a property loan.
A loan against property can truly come in handy when one is in a financial crunch. Instead of taking on a fresh loan, it is better to let your property help you raise the funds you need Like it? Share it!More by this author |