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How To Avail Loan Against Property?

By Author: Aishwarya Mahurkar
Total Articles: 291

A loan against property is a type of loan which a financial institution provides to an individual against the mortgage of the property. The loan provided is usually about 40 to 60 percent of the actual value of the property. This type of a loan is relatively easier to get approval for since the applicant provides the property as security for the financial institution. Such a loan can be used for a variety of purposes. An individual can use this loan to finance their child’s studies abroad, their marriage or even starting a new business venture.


Eligibility


The eligibility criteria for such a loan are basically the applicant’s income, credit score, value of the property being mortgaged and savings. Even though the property is being used as security, it is important for the financial institution to ensure that the loan applicant can afford to repay the loan. The first thing that is studied is the applicant’s credit score. It is vital for an individual to ensure that they maintain a reasonably high credit score. To do this one must repay any pending loans t boost their credit score. One can also reduce the number of credit cards in their name as a credit card is a type of short term loan. With a steady income and a high credit score, one can easily get their loan against property application approved with ease.


Repayment plans


It is crucial for an individual to plan in advance how to repay their loan. The financial institution keeps in consideration the applicant’s income when issuing a loan. The loan amount will never exceed 60 percent of the applicant’s salary when calculating EMIs. It is still advisable that the applicant starts reducing his monthly expenditure so that the EMIs will not place a huge financial burden. Another way one can do this is by saving up in advance in case of month’s where in the applicant may not be able to afford the repayment. An applicant must never default on their EMIs as failure to repay the loan may force the bank to seize the property and sell it to recover the loan amount.


Loan against property is an ideal type of loan for those who need finances for a variety of needs. It is a better option as compared to a personal loan as it is a more affordable option. Since the applicant is providing their property as security, the interest charged on such a loan is comparatively lesser. If you need additional finances to afford your child’s higher education abroad fees or to start a new venture, one must opt for a loan against property.


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.

Total Views: 77Word Count: 478See All articles From Author

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