Health Insurance
Overview
A loan against property is a secured loan you can take by pledging your residential property, commercial property, or a plot of land as collateral. With such a loan, you can secure a loan amount of up to a certain percentage of your property’s value. Lenders also offer low processing fees and affordable interest rates on the loan. The best part? These loans can be used freely, without specifying the end-use to the lender. This means they can easily cover all your expenses – education costs, home renovation, vacations, and more.Like most other loans, finding the best loan against property deal starts with choosing the right lender.
Uses of Loan Against Property
A loan against property helps you cover expenses of any kind, no matter how big.
Home renovation
The place you’ve always called home needs an upgrade now and then. Give your house a face-lift with an easy home loan against property. This loan covers all your home remodelling costs, from a kitchen upgrade to balcony extension, without leaving a hole in your pocket.
Education
Higher education often requires a substantial amount of funds. Using up your savings to pursue education is not a financially wise move. Use a loan against property to manage your costs of tuition and living easily. Enjoy affordable interest rates and quick approvals with a variety of lenders.
Business expansion
If you’re planning to expand your business, you need adequate capital to pay for expenses like utilities, rent, salaries, and more. A loan against property can help you easily cover these costs. These secured loans are available on competitive interest rates and easy terms. Scale your business with feature-rich loans offered by several lenders.
Buying property
You can also use a loan against property to finance the purchase of a flat or property. Some homeowners choose this route for buying a home when they are not able to get a home loan for buying additional property. You can pledge either commercial or residential property to avail a loan against property for this purpose.
Wedding
When you’re planning your dream wedding, you only want the best. Before you know it, wedding costs pile up quickly. Thankfully, a loan against property can take care of all the costs associated with your big day. Be it a grand venue or the best makeup artist, fund all your expenses with a loan against property.
Travel
Don't wait to save up enough before you can finance your next vacation. Get a loan against property to pay for all travel expenses, big or small. Jet off to exotic foreign lands you’ve always wanted to visit with an easy loan against property.
Eligibility Criteria
A Loan Against Property can be availed of by anyone, whether you are a salaried employee, government employee, or a working professional. All you have to do is fulfill basic eligibility conditions laid out by banks and NBFCs. While personal loan eligibility conditions can differ across banks and NBFCs, here are some standard criteria you must be:
Salaried or a working professional
Aged between 21 and 60 years
Having a job and a minimum of 3 months experience
Having a minimum of Rs. 25,000 net income per month.
Processing Fee
The processing fee on a loan against property is a one-time charge made to the lender during the submission of the loan application form. It is usually 0.5-2% of the total loan amount.
This amount goes towards the lender’s administrative costs in processing and sanctioning your loan. Usually, this amount is deducted from your loan amount before the lender disburses the funds. DK Finsage Consultancy helps you compare different options and find the right loan against property with the lowest processing fees.
Loan Against Property Balance Transfer
A loan against property balance transfer happens when a borrower moves their outstanding loan from their existing lender to a new lender offering competitive interest rates and terms. It can help you save on interest payments, lower the EMI amount, and reduce the overall debt burden. Usually, a balance transfer is a financially smart move in the initial stages of your loan repayment, rather than later.
Balance transfers require collateral. They also involve a few additional charges like processing fees, foreclosure fees, etc.
Remember, refinancing your loan through a balance transfer is a great idea if you are in the early stages of paying off your loan and have a large interest component to pay. When you balance transfer your existing loan to a new lender offering a lower interest rate, the overall interest component reduces. This, in turn, makes loan EMIs more affordable.
Documents required for a balance transfer
- If you are considering a loan against property balance transfer, here are some documents you will need.
Latest salary slips - Bank account statements of the last three months
- PAN card
- ID Proof
- Address proof
- Title documents
Eligibility
Virtually any resident Indian can take a loan against property, provided they meet the requirements specified by the lender. The standard loan against property eligibility criteria is as follows.
Salaried professional or self-employed
Aged between 21 and 60 years.
Having a minimum of 2 years of experience if you are a salaried individual.
Having a minimum of 3 years of experience if you are self-employed.
Having a minimum annual income of Rs. 3 lakhs for both salaried and self-employed individuals.
Can’t ascertain your eligibility? Use our loan against property eligibility calculator today.