When bank or NBFC provides loan to the borrower against his property is called loan against property. It is like personal loan where loan amount can be utilized by the borrower to fulfill his personal or business need but there are various differences between the personal loan and loan against property, which are as follows:Rate of Interest: Personal loan is an unsecured loan so bank or NBFC charges high rate of interest on personal loan. Personal loan rate of interest offered by bank or NBFC ranging from 10% p.a. to 30% p.a. depends upon profile of the customer and his credit worthiness. Loan against property is a secured loan which is secured against property of the borrower so lender charges comparatively low rate of interest. Loan against property rate of interest offered by bank or NBFC ranging from 8.50% p.a. to 18% p.a. depends upon profile of the customer and his credit worthiness. Loan Tenure: Personal loan provided by the bank or NBFC for shorter period of time i.e. 1 year to 5 years. Bank or NBFC offers longer period of time for repayment of loan against property. Loan tenure for loan against property is in between 3 years to 15 years. Even 20 years also offered by some bank or NBFC. Loan Amount: As the personal loan is an unsecured loan so bank or NBFC imposed capping on the loan amount. Bank or NBFC provide up-to Rs. 50 lacs under personal loan.
As the loan against property is a secured loan so there is no capping on the loan amount by bank or NBFC. A borrower can avail Rs. 10 lacs to Rs. 100 crore against his property subject to fulfillment of loan eligibility criteria.EMI: EMI calculation depends upon three factors i.e. (i) Loan Amount, (ii) Loan Tenure, and (iii) Rate of Interest. Due to lower rate of interest and longer repayment period, EMI on loan against property is lower than personal loan.
Business Expansion: All the successful businessman wants to expand his business. Business expansion requires expansion capital. Finding expansion capital can be a frustrating experience. It can be far less if you owned a residential or commercial property. You can borrow loan against property from bank or NBFC and utilized loan amount towards your business expansion.
Consolidation of other Loans: You may have taken so many personal loan, business loan, gold loan etc. from bank or NBFC. These loans were offered by bank or NBFC for shorter period on high rate of interest resulting on heavy EMI. These EMI may eat your business liquidity also. As there are many small loans, so you have to keep extra resource to manage repayment of all these loans. As loan against property offered by bank or NBFC comparatively at lower rate of interest for longer period of time resulting in low EMI. You can take loan against property and repay all these small loans and keep a single EMI.
Personal Expenses: Life is full of uncertainty. We have to make certain expenditure for which we have not made any planning. Event such as medical emergency, child higher education, daughter marriage, etc. required a lot of money. Either one has to sell his property or borrow loan against property from bank or NBFC to meet these expenses.
Type of loan against property depends upon types of property, an individual want to mortgage with bank or NBFC. As per the need of the customer banks or NBFC offers different types of loan against property at lower rate of interest.
Each loan against property has its unique feature and advantage, so it is always advisable to consult with a professional consultant before taking a loan against property.
If you need a professional guidance then contact LOAN ON PHONE. We have unique solution for all your financial needs.Loan against property can be classified into following ways:
Loan against Property (Residential): When borrower wants loan against his residential property from bank or NBFC then it is called loan against residential property. As per the usage of residential property it is sub-divided into following categories:
Loan Against Property (Commercial): When borrower took loan against his commercial property, i.e. office, shop, showroom etc. from bank or NBFC then it is called loan against commercial property. As per the usage of commercial property it is sub-divided into following categories:
Loan Against Plot: When borrower took loan against vacant land from bank or NBFC then it is called loan against plot. There are few banks that provides loan against plot. Rate of interest varies in between 12% p.a. to 16% p.a. Bank or NBFC extend loan up-to 35% to 50% of market value of property.
Loan against property is an agreement between borrower and the lender (bank or NBFC) that regulates the terms of loan. All the bank or NBFC have their own loan eligibility criteria but there are some common loan eligibility criteria which borrower has to fulfill to avail loan against property from bank or NBFC.
Following are some key important factors which would be checked by bank or NBFC to accept or reject the loan against property application:
Documents required for loan against property depends upon the type of employment of an individual.
Documents required for different types of employment are as follows:
Before taking loan against property it is advisable to consider following factors:
Today internet is the source of information and there is a lot of information available about the loan against property on internet and we have also tried to give you some information about loan against property but the most important question is that Why I should take loan against property from LOAN ON PHONE and how do we help you in choosing best loan against property?
Almost all the banks or NBFC claims to offer you the best deal. Most of the people confused with the various offers and deal, so we are here to help you to choose the best loan against property.About LOAN ON PHONE
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