A loan against property can save you from trouble when you are stuck financially. It gives you a high loan amount against fairly simple eligibility criteria. Moreover, you can choose a longer repayment term, which takes away the stress of loan repayment.
This article informs you about the things you should consider before applying for the best loan against property.
Why Should You Apply For a Loan Against Property?
When you need money urgently, getting a cost-effective loan option becomes paramount.
Applying for a loan against property can be the best decision for you. Loan against property comes with a high loan amount, attractive interest rate, flexibility in end-use, long repayment term, minimal documentation, relaxed eligibility, and quick approval unlike personal loans.
To apply for a loan against property, you need to pledge your property. The lender retains your property documents as security and offers more benefits than most other loans.
What Is The Eligibility Criteria of a Loan Against Property?
When you apply for a loan against property, the lender will evaluate the eligibility and determine the loan amount and interest rate. The factors they consider include the borrower’s credit score, gross income, age, property value, and property location.
A credit score above 800 may make you eligible to get a loan against property at the lowest interest rate. The minimum income level differs from lender to lender. Additionally, if your age is closer to the maximum age for a loan application, the lender may increase the interest rate to adjust the risk.
What Are The Documents Required to Apply For a Loan Against Property?
Although property paper is the most important document required to apply for a loan against property, lenders may require some additional documents for verification purposes. The following is a comprehensive list of documents required to apply for a loan against property:
- Application form
- Age proof
- Residence proof
- Educational qualification – Latest degree certificate
- Income proof – salary slips and appointment letter (for salaried professionals) and Profit & Loss statement and business profile (for self-employed professionals and non-professionals)
- Bank account statement – 6 months (for salaried professionals) and 12 months (for self-employed professionals/non-professionals)
- Income Tax Returns for the previous three years
- Processing fee cheque
- Property papers, including title deed, approved plan, occupancy certificate, etc.
What is the Interest Rate of Loan Against Property?
Loan against property interest rates depend on your eligibility. If your eligibility is high, you can apply for a loan against property with the lowest rate. Besides the factors mentioned above, some other factors that influence the interest rate are loan term, borrower’s profile, and lender’s discretion. For example, a government officer might be eligible to get a lower loan against property interest rate over someone with an unstable income source. Moreover, if the loan term is short, the lender may increase the interest to mitigate the risk. PNB Housing Finance loan against property interest rates start from 9.50% and goes up to 11%.
What is The Approval Process of Loan Against Property?
Loan against property application process is uncomplicated and seamless. You can visit the lender’s website and apply online.
Alternatively, you can call the lender and place the loan request. Some lenders like PNB Housing offer doorstep service. When you apply for a loan against property with PNB Housing, they send a loan officer to your address who helps you with the application process. After successfully verifying the documents and property, the loan officer sends an approval note to the lender, who approves the loan.
The checklist simplifies applying for a loan against property. You need to check the lender’s terms, interest rate, eligibility, and other factors before applying for the loan.