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How To Get An Affordable Loan Against Property
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A loan against property is a loan given by the lender against the market value of a property. The key feature of this loan is that it is a secure loan and a win-win situation for the lender and the borrower. The amount of the loan depends on the market value of the property and is subject to variation. It is taken by people to start a business or to expand an existing one, to fund children’s college education or for medical purposes.
Since a loan against property has different criteria in comparison to a personal loan, it is vital to understand the process and the preliminary preparations required for this loan application. By doing so and being ready with the important documents, the process to get not only affordable but desired loan against property becomes easier.
1. Identity proof
When applying for a loan against property it is essential that you have the original as well as the photocopies of all the important documents. Documentation plays a major role in loan application because it reflects your current personal and financial state. You need to submit a copy of your Voter ID card, passport and PAN card. These documents are important because they provide identity proof, whereas your telephone bill or electricity bill is your proof of residence as stated in the form. In case of income proof, the documentation varies for self employed and salaried individuals. You are also required to submit a copy of ownership documents for the property against which the loan will be given.
2. Property papers
Since you are taking a loan against the property, it is important that you evaluate the property that you are mortgaging. The loan amount offered by the bank is 40% to 60 % of the market value of the property. It can be a residential or a commercial property, but it should be in the name of the loan applicant. Also, it should be a freehold property and the title of the property should be clear.
3. Current debt records
Most banks look at the past track records in terms of finance of loan applicants. Factors such as current standing debt and repayment of prior loans are taken into consideration by the bank. The number of credit cards under the loan applicants name is also considered because a credit is a loan provided by the bank on a monthly basis.
4. Age proof
Since one is expected to provide income proof of the past three years, the minimum age of the applicant should be 24 years. All lenders even bankers want a full reimbursement of their loan plus interest; the maximum age of the applicant is limited to 60 years for salaried individuals and 65 years for self employed people.
Thus, when applying for a loan against property; one should keep the aforementioned factors in mind.
Author Bio :
Aishwarya Mahurkar is an experienced writer concerning the finance industry. Her articles help in informing her readers of the different types of home loan products such as Home improvement / renovation loan, loan against property.
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