There are times when you need instant funds for a short-term period. It could be for any situation like paying your creditors, meeting the wedding expenses of your children, to bear costs of your children’s higher education or renovating your home and many more situations. In case if you have your own property or own a property, You can easily get an instant loan by using your property as security or collateral. This type of loan is known as property loan. But before opting for the loan however, there are some points to consider before applying for such loans. Read this article carefully and apply for the loan.
Points To Consider Before Applying Property Loan:
Accurate Valuation of Property
The value of a property depends on multiple factors like the location, age, amenities offered, the builder’s reputation, and more. When you apply for a loan against property, the lender will get your property valued by a valuation expert.
The amount of loan you can get is 60% for residential property and 70% for commercial property. So if the market value of your residential property is Rs. 1 crore, then the amount of loan you can get is Rs. 60 lacs. If you are taking a loan against your commercial property, the loan amount will be Rs. 70 lacs.
Compare Rates Offered by Lenders
The loan you apply for will depend on your loan repayment capacity, so calculate your monthly EMI using the free online tools and then decide the loan amount. There are real estate aggregators where you can compare the different interest rates and repayment terms, and choose one that offers you the best deal.
Speak to the lender to check for any hidden charges including any prepayment penalties. You can calculate your EMI by just entering your loan amount, tenure, and rate of interest.
Estimation of the expenses is essential since it will help you calculate the amount of loan you need. Whether it’s the higher education of your children, their marriage, or payment of your creditors, make a list of all the expenses associated with the event.
Your monthly cash flows are the difference between your income and expenditure. As a rule of thumb, your total monthly expenses including the EMI should not exceed 50% of your disposable income.
You can get a loan of up to Rs. 5 crores.
Additional Benefits Offered by the Lender
There are some value-added services you might get from a lender. These could include an insurance cover equal to the loan amount so that your dependents don’t have to repay the loan when you’re not there. Ask your lender for value-added services before you apply for a loan.
Eligibility Criteria for Loan Against Property
After choosing the lender, you need to find out the loan against property eligibility. The following are the eligibility criteria for such loans:
- Applicant Profile: Both salaried and self-employed individuals are eligible for such loans.
- Age: Salaried individuals need to be between 21 and 60 years. Self-employed individuals between the age of 21 and 65 can apply for these loans.
- Residential Status: You need to be a resident of India
- Employment Status: Employees of MNCs, private and public sectors are eligible to apply
- CIBIL score: You need a CIBIL score of at least 700. The CIBIL score is an indication of your past credit history and repayment capacity. The higher your score, the lower the interest rate and flexible your repayment period. The loan amount is also higher.
Documents Required for Loan Against Property
Documents required for such loans vary depending on whether you are salaried or self-employed. The following documents are required for salaried people:
- Proof of Identity: PAN card, driving license, Voter ID card, or passport.
- Address Proof: Rental Agreement, Telphone bill, ration card, Passport, bank statement/passbook, or electricity bill
- Age Proof: Passport, PAN Card, or Aadhar card.
- Last 6 months bank statements or salary slip
- Form 16
- Documents regarding the property being offered as security. If all required documents are available, you can get a higher loan.
- Last 3 years income tax return
- Payment for processing fee
Your property is an asset and you can use it during an emergency to get a loan. The amount of loan you can get and the repayment period will depend on a lot of factors. With companies, you can get a loan against your commercial or residential property.
You can check your eligibility criteria at our website before you apply for a loan. The application process is simple and hassle-free. Documentation is minimal, and you can use our online tool to find out your monthly EMI for the loan. We customize the loan to suit your requirements.
The loan is disbursed within minutes, and you can fulfill all your requirements like payment of your creditors or higher education of your children. We offer flexible repayment terms of up to 15 years without any hidden charges. These loans are given at competitive rates and we have a high loan-to-value ratio that depends on whether you are mortgaging commercial or residential property.