Long Term Financing Gets A Lot Easier With Loan Against Property

Posted by reema sharma on September 24th, 2019

Loan against property or LPA is a pretty common term generally used in real estate and property markets. Basically a LPA is nothing but a secured loan. A secured home loan against property is something which is associated with a piece of collateral that is something like a house or properties. Also remember that the value of property that it been used as collateral decides the amount or extent of loan you can get.

Types of loans offered

Here are few different kinds of properties against which loans can be availed:

• Self owned residential properties

• Self owned as well as self occupied residential properties

• Self owned but rented residential properties

• Self owned piece of land

• Self owned commercial properties

• Self owned but on rent commercial properties

What are the criteria for loan against property?

Generally the regulations vary for both salaried and non salaried individuals. Here's how

Salaried individuals

• Age: from 18 to 70 years

• Maximum loan tenure: 15 years most

• Monthly income eligibility: Generally around Rs. 25,000 or you should be working in a MNC or PSU or private sector enterprises

• Loan as a percent of property value: around 2 years of age

• Minimum work experience: at least 2 years

For non salaried self employed individuals

• Age: from 18 to 70 years

• Maximum loan tenure: 15 years most

• Monthly income eligibility: individual should have a steady and regular income at around Rs.25,000

• Loan as a percent of property value: about 65%

• Minimum work experience: at least 2 years

What are the documents required?

The documents needed for salaried individuals are

• Latest pay slips

• Bank statements for latest 3 months

• Pan and Aadhar details along with KYC

• Address proof

• Documents associated with the property to be mortgaged

• IT returns

The documents required for non salaried individuals

• Banks statements for the last 6 months

• Pan, Aadhar and kyc details

• Address proof

• Documents associated with the mortgaged property

How is the EMI calculated?

Generally the EMI for the loan is calculated based on the principal amount, the tenure till maturity, and the interest rates which are applied. Note that even if you apply for fixed interest rates the amount of interest on your EMI might keep on shifting till the loan amount is matured.

The basic mathematical formula employed in EMI calculation is

"E = [P x R (1+R) N]/ [(1+R) N-1]"

Where P= principal amount

R= rate of interest applied

N= tenure

Steps for applying for loan against property

Getting LPA is pretty easy and hassle free if you have your paperwork right. Here are the steps to get your home loan against property instantly

• Start with application

• Go with processing

• Put in all documents

• Wait for the sanctioning of the home

• Let the lenders run a deep check on your valuation and credentials

• In the final step the money will be disbursed

To Conclude

Loan against property is easy to get if you have a self owned property and all other documents ready. So just find the right lender and get your loan amount sanctioned now.