How to request a loan against the property?
Real EstateA homestead loan is a secured loan where residential/commercial property is pledged as collateral. It is a long-haul progress. Loan against property is exceptionally prevalent among the self-employed. The loan against the property is reasonable compared to individual loans, since the interest charged is equally low.
The interest rate ranges from 9 to 14% per year. Although the anticipated residence for a loan against the property ranges between 1 and 9 years, it can be extended up to 15 years. The lender verifies your financial assessment before endorsing the loan. To benefit from a property loan, you must have an unequivocal and attractive title to the property.
Banks provide loans ranging from 50 to 65% of the value of the property. NBFCs (Non-Account Finance Companies) offer loans of up to 75% of the property estimate. A Home Loan has a processing fee that ranges from 0.5 to 1.5% of the authorized credit amount.
Why apply for a Property Loan?
LAP helps meet short-term and long-term financial requirements such as children’s education, business, medical emergencies, etc.
Eligibility criteria to apply:
All co-owners of the property must be co-applicants.
Employees must be between 22 and 65 years of age.
The self-employed must be between 25 and 65 years old.
Properties not accepted as collateral:
a plot of land
Ownership of a cooperative society
industrial ships
Warehouse or cold room
Agricultural building or land
property under construction
Rules:
The property must be insured.
The property must meet the minimum area criteria required by banks.
The property must satisfy the minimum market value, depending on where it is located, whether in non-metropolitan or metropolitan cities.
How much loan can be used in LAP?
Lenders determine loan eligibility based on a percentage of the property’s market value and ability to pay. Non-bank finance companies (NBFCs) and banks typically offer a loan amount of between 50-65% of the property’s value.
Tenor:
The term of a loan against the property varies from 1 to 9 years. However, it can be extended for up to a period of 15 years. Interest rate of a loan against property: The interest rate of a loan against property is lower than that of a personal loan. The loan against the property has an interest rate that ranges between 9 and 14% per year.
Charges and Penalties:
The rates, charges and penalties to be paid are the following:
Processing Fee: Ranges from 1-2% of the available loan. This amount is deducted from the sanctioned loan amount.
statutory charges
stamp fillers
Penalty in case of late payment of the EMIs (Balanced Monthly Installments), a late payment interest of 2-3% per month is paid on the amount of the overdue installment.
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