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Benefits Of Opting For A Loan Against Property

By Author: Aishwarya Mahurkar
Total Articles: 291

When you find yourself in a financial pinch, it might be a good time to judge your property for what it is worth, because you can opt for the cost-effective loan against property. Exactly as the name suggests, it is a loan disbursed against the security of a property owned by a person. Increasingly gaining popularity in India, the loan is similar to the likes of a home loan or a personal loan, however, being a secured loan, a person has to pledge his residential or commercial property, for example a piece of land, as a collateral if it is not already mortgaged. The amount of loan is determined by the value of the property, and if the condition of the property is acceptable by the lender. You can get a loan worth 40-70% of your existing asset, with a low loan against property interest rate, and a long tenure. Below are a few points elaborating the benefits of a loan against property:


1) Interest Rate and tenure:


Loans against property interest rates are lower than that of personal loans, and lower than that of all other loans, second only to home loans with a rate that varies from 12-16%, and can be floating or fixed. With a lower rate of interest, the EMI (Equated Monthly Installments) turn out smaller. The tenure, usually 1-9 years, can be extended up to 15 years depending on the value of the property.


2) Loans for any purpose:


The loan can be taken for any purpose, personal or for business, giving one the same advantages of a personal loan with lower interest rates and a longer tenure. One can use it to finance their child’s marriage or education, to fund medical treatments, or to expand or set up a business, without being answerable to the institution lending the money.


3) Possibility of appreciation of the value of property:


One of the advantages of mortgaging a house is the possibility of the increase of its value over time, in case of which, the loan amount can be refinanced to an amount greater than the original sum borrowed.


4) Does not hinder daily life:


Taking a loan against property does not hinder the flow of the regular life of the borrower, as the process is faster due to the house already existing, and the advantage of having the house under your ownership while making use of the mortgage money. Its lower EMIs put a lighter burden on the monthly expenses than a personal or home loan.


Loan against property is set to be one of the most beneficial all-purpose loans that can be opted for by any person. With minimum disadvantages as compared to home or personal loans, it is still gaining ground in India, and steadily at that.

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 loan against property interest rates, Home improvement / renovation loan, loan against property.

Total Views: 154Word Count: 496See All articles From Author

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