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In today's competitive world, you need money for everything, right from funding your own business to paying for your children education. One of the first thoughts to come to one's mind is, "Where do I get the money from?" There are several ways to get the funding; however, one of the easiest ways is to pick a loan and a 'loan against property' is certainly the easiest loan available to people today.
What does it mean?
The first thing to do would be to understand what a 'loan against property' is. In simple language, it is a loan, which is disbursed or sanctioned against the mortgage of one's property. You can mortgage the property whether it is self-occupied or rented out to someone else. This property can be both in the form of a housing area or in the form of a piece of land.
How can I qualify?
Banks will specify different eligibility criteria for you to be able to opt for a loan against property in India. Most banks and finance companies will conduct a study to ensure that a person's finances are of sound nature. The bank undertakes a study to find out how much you earn, details about your savings, and the debts that you have. The lenders will also make sure that you have cleared all your previous loans and credit card payments.
Why is it used?
A loan against property in India , especially, can be very helpful as it can be used for a varied range of purposes. It is considered a secured loan because the borrower of the money provides his property as collateral. This loan can usually be taken for a period of 15 years. Usually, the rate of interest on the loan against property is between 12-15%, which is much lower than any unsecured loan.
Is it better than a personal loan?
There is a difference between a loan against property and a personal loan. The personal loan falls under the category of being an unsecured loan because the borrower does not provide the bank with any kind of collateral. The rate of interest on a personal loan is much higher than the loan against property interest rates.
Also, a personal loan can be taken only for a period of 5 years. The loan against property is one of the best ways of sourcing money. However, one main disadvantage is that the bank will take hold of the property mortgaged if the borrower fails to repay the loan. A person should only take up such a loan if he is sure that he can repay the same in due time.
What does it mean?
The first thing to do would be to understand what a 'loan against property' is. In simple language, it is a loan, which is disbursed or sanctioned against the mortgage of one's property. You can mortgage the property whether it is self-occupied or rented out to someone else. This property can be both in the form of a housing area or in the form of a piece of land.
How can I qualify?
Banks will specify different eligibility criteria for you to be able to opt for a loan against property in India. Most banks and finance companies will conduct a study to ensure that a person's finances are of sound nature. The bank undertakes a study to find out how much you earn, details about your savings, and the debts that you have. The lenders will also make sure that you have cleared all your previous loans and credit card payments.
Why is it used?
A loan against property in India , especially, can be very helpful as it can be used for a varied range of purposes. It is considered a secured loan because the borrower of the money provides his property as collateral. This loan can usually be taken for a period of 15 years. Usually, the rate of interest on the loan against property is between 12-15%, which is much lower than any unsecured loan.
Is it better than a personal loan?
There is a difference between a loan against property and a personal loan. The personal loan falls under the category of being an unsecured loan because the borrower does not provide the bank with any kind of collateral. The rate of interest on a personal loan is much higher than the loan against property interest rates.
Also, a personal loan can be taken only for a period of 5 years. The loan against property is one of the best ways of sourcing money. However, one main disadvantage is that the bank will take hold of the property mortgaged if the borrower fails to repay the loan. A person should only take up such a loan if he is sure that he can repay the same in due time.
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