A secured loan is a type of borrowing that is backed by collateral—assets you own. When you opt for a secured loan, you pledge this collateral as security. If you fail to repay the loan, the lender has the right to claim the collateral to recover their losses.
Because collateral reduces the lender’s risk, secured loans often make it possible to finance significant purchases, such as a home, car, or other high-value items. Secured personal loans can also offer flexible borrowing options and often come with benefits like lower interest rates compared to unsecured loans. However, they carry certain risks, and it’s crucial to understand how they function and the potential consequences before borrowing. Here’s everything you should know before applying for a secured loan.
A loan against property by Bajaj Finance exemplifies the essence of secured loans, offering property owners a powerful financial tool. By leveraging the equity in their real estate assets, borrowers can access substantial funds through a loan against property. This secured financing option provides flexibility and competitive interest rates, making it an ideal choice for those looking to unlock the value of their properties while managing their financial needs.
Whether it is funding a dream project, managing unexpected expenses, or consolidating debt, a loan against property can be your financial partner. Bajaj Finance makes the process seamless and rewarding! This secured loan allows you to access funds while retaining ownership, making it an excellent option for business expansion, education, medical expenses, or debt consolidation. With lower interest rates and flexible repayment terms, loan against property provides a smart way to unlock your property's financial potential. Check your loan against property eligibility in seconds.
What is a secured loan for loan against property applicants?
A secured loan is a type of borrowing in which the borrower pledges an asset as collateral to the lender. This asset serves as security, reassuring the lender that they can recover their funds by seizing and selling the collateral if the borrower fails to repay the loan. Due to this reduced risk, secured loans typically feature lower interest rates, higher loan amounts, and longer repayment terms compared to unsecured loans.
Pledge collateral: You offer a valuable asset, such as a home, car, or financial investments, to the lender to guarantee the loan.
Lender places a lien: The lender places a legal claim or lien on the collateral. This gives them the right to take possession of the asset if you default on the loan.
Receive funds: After evaluating the collateral's value and your financial history, the lender disburses the loan amount.
Make repayments: You repay the loan, plus interest, in regular installments over the agreed-upon term.
Lien is released: Once the loan is fully repaid, the lender releases the lien, and you regain full ownership of your asset.
Default results in repossession: If you fail to make payments, the lender can seize and sell the collateral to recover the outstanding debt.
Considering financial flexibility? Tap into the equity of your property today with Bajaj Finserv Loan Against Property, tailored to meet diverse funding needs. By pledging the value of your own property, you can access large funds—all with flexible repayment options and competitive interest rates.
Features of secured loans
Secured loans offer several distinct advantages and characteristics, making them an attractive option for borrowers seeking higher loan amounts. Below are key features of secured loans:
- Collateral requirement: A secured loan requires the borrower to pledge an asset (e.g., property, vehicle, or savings) as collateral. If the borrower defaults, the lender can seize the asset to recover the loan amount.
- Lower interest rates: Since secured loans are backed by collateral, lenders typically offer lower interest rates compared to unsecured loans, making them more affordable for borrowers.
- Higher loan amounts: Lenders are more likely to offer larger loan amounts with secured loans, as the collateral reduces the risk for the lender.
- Longer repayment tenure: Secured loans often come with longer repayment periods, providing borrowers with the flexibility to manage monthly payments.
- Better chances of approval: The presence of collateral increases the likelihood of loan approval, even for borrowers with a lower credit score.
Types of secured loans for property owners
Secured loans provide property owners with an opportunity to leverage their assets to access funds for various needs. These loans are backed by collateral, typically property, ensuring lower interest rates and higher loan amounts. Here are common types of secured loans for property owners:
- Home loan: Used to finance the purchase or construction of a residential property, offering attractive interest rates and long repayment tenures.
- Loan against property: A multipurpose loan where owners mortgage their residential, commercial, or industrial property to meet personal or business needs.
- Home equity loan: Allows borrowing against the equity built in an existing property, offering a lump sum for large expenses.
- Reverse mortgage: Designed for senior citizens to receive regular payouts by pledging their property while retaining ownership.
- Construction loan: Tailored for property owners constructing a building, with funds disbursed in stages based on project progress.
Looking for a hassle-free secured loan? Loan against property simplifies the process. With competitive interest rates and tailored repayment options, it is the perfect choice for property owners seeking financial freedom. Use your property to get instant funds with better terms. Check your eligibility now!
How secured loan works?
A secured loan requires you to pledge an asset, such as a home, car, or fixed deposit, as collateral to obtain funds from a lender.
The loan amount you can borrow is usually determined by the value of the collateral.
Once approved, the funds are disbursed, and you must repay the loan in regular installments along with interest, as per the agreed schedule.
If you fail to repay, the lender has the legal right to seize the pledged asset to recover the outstanding loan amount.
Because collateral reduces the lender’s risk, secured loans often have lower interest rates and higher borrowing limits compared to unsecured loans.
Secured loans can be used for purposes such as home purchase, vehicle financing, education, or emergency expenses.
It is essential to understand the terms, repayment schedule, and risks before taking a secured loan to ensure financial safety.
Exploring loans against property as secured financing options
Among the array of secured financing options, a loan against property stands out as a versatile solution. This type of loan allows property owners to unlock the value of their real estate assets without selling them. Whether for personal or business purposes, a loan against property provides borrowers with access to substantial funds, often at lower interest rates compared to unsecured loans.
Where to find secured loans for property-backed financing?
Secured loans for property-backed financing can be obtained from various financial institutions, including banks, credit unions, and online lenders. Traditional banks typically offer mortgage loans and home equity loans, while Non-Banking Financial Companies specialise in loans against property and other secured financing options. Online platforms have also emerged as convenient avenues for securing loans against property, offering streamlined application processes and competitive interest rates.
If you are considering secured loans, a loan against property offers more than just financing. It provides flexibility, attractive interest rates, and the ability to use your property as a powerful financial asset—all without giving up ownership. By using your property as collateral, you can unlock access to large funds of up to Rs. 10.50 Crore*—it is a smart way to manage your finances with ease! Get funds within 72 hours* of approval.
Secured loans vs. unsecured loans: understanding interest rates
Aspect |
Secured Loan |
Unsecured Loan |
Definition |
A loan backed by collateral, such as property, vehicles, or fixed deposits. |
A loan granted without any collateral, based on creditworthiness and income. |
Collateral Requirement |
Yes, an asset is required as security. |
No collateral is needed. |
Loan Amount |
Typically higher, depending on the value of collateral. |
Usually lower, based on income and credit profile. |
Interest Rates |
Lower, due to reduced lender risk. |
Higher, as the lender bears more risk. |
Approval Process |
Longer processing, involves legal formalities for collateral. |
Faster approval, minimal documentation. |
Advantages |
Lower interest rates, higher loan amounts, flexible repayment, suitable for high-value expenses like home or vehicle. |
Quick disbursal, no risk of losing assets, flexible usage for personal or emergency needs. |
Disadvantages |
Risk of losing collateral if repayment fails, longer processing time. |
Higher interest rates, lower borrowing limits, default impacts credit score. |
What happens if I default on my secured loan?
Defaulting on a secured loan can have serious consequences, primarily for the borrower. In the event of default, the lender has the right to seize the collateral (i.e., the property) to recoup the outstanding debt. Depending on the terms of the loan agreement and applicable laws, the lender may initiate foreclosure proceedings to reclaim the property. Additionally, defaulting on a secured loan can negatively impact the borrower's credit score and financial standing.
Explore Bajaj Finserv Loan Against Property
Loans against property serve as a prime example of secured loans, with products like Loan Against Property by Bajaj Finance offering property owners a reliable financing solution. Bajaj Finance's loan against property stands out for its competitive interest rates, flexible repayment options, and speedy approval process. Applicants can also use the loan against property emi calculator to estimate their monthly installments and plan repayments better. Here is why one should apply for a loan against property with Bajaj Finance.
- Simplified application process: Our meticulously designed application ensures a seamless experience. Apply online and expect approval within 72 hours after document verification.
- Customised solutions: Tailored to your needs, our loans offer flexibility in adjusting features such as the loan amount and repayment period.
- Competitive interest rates: Benefit from highly competitive loan against property interest rate starting as low as 8% to 14% (floating interest rate) p.a.
Leveraging secured loans for property-backed financing
In conclusion, secured loans, particularly those exemplified by products like Loan Against Property by Bajaj Finance, provide individuals and businesses with a robust financial solution backed by valuable assets. The flexibility, competitive interest rates, and streamlined processes offered by Bajaj Finance make accessing capital against property convenient and efficient. By understanding what is a secured loan and leveraging reputable financial institutions like Bajaj Finance, borrowers can confidently navigate their financial needs while unlocking the potential of their property assets.
Did you know you may be eligible for our offers on a loan against property with low-interest rates? Get a loan of up to Rs. 10.50 Crore* with the option of interest-only EMIs during the initial tenure.
Property loan based on amount
Property loans are offered based on the property’s value, allowing borrowers to finance a portion of the cost. The loan amount, interest rate, and tenure depend on property type and borrower eligibility.
Apply for a Loan Against Property in different cities
You can apply for a loan against property in various cities across India through a simple online or offline process. Access quick approval, flexible repayment options, and competitive interest rates tailored to your needs.
Popular calculators for your Property Loan calculations
Use these popular calculators to estimate your property loan EMI, interest payable, and repayment tenure. They help you plan your finances effectively before applying for a home loan.
