You cannot underestimate the importance of loans, as this financial tool allows you to fulfil your goals with ease. Since a plain loan may not meet your unique requirements, lenders offer innovative financial products to cater to your evolving needs. Among other loans, a mortgage loan is gaining immense popularity by the day. Also known as a loan against property, its market is worth over Rs. 2.5 lakh crore today.
Since property is involved, it is also regarded as a property mortgage loan or a mortgage loan against property. Based on the type of asset or property you mortgage, this loan can either be:
- Land mortgage loan: This is also known as a loan against the land. Depending on the type of land that you pledge, you can either avail a mortgage loan against agricultural land or a loan against plot
- Home mortgage loans: Here, instead of land, you pledge a home and draw from its equity
However, you need to understand that a mortgage loan or a property loan is different from a reverse mortgage loan. It is because, under a reverse mortgage scheme, you require to pledge your existing home with a lender of your preference, who then offers you a regular source of income for a pre-decided tenor based on the value of your property. On the other hand, in case of the loan against property, you avail a loan basis your pledge, and then you repay the loan through your chosen tenor to retain the ownership of your asset.
Here are the important aspects that you need to know about a loan against property.
Properties that you can pledge
You can pledge any of your existing properties as security to avail a sanction. These may be:
- A residential or commercial self-occupied property
- A house or apartment in your name that you may have rented out
Loan amount, interest rate, and tenor
Since the lender offers an amount of up to 70-75% of your property’s market value as the sanction, this is usually a big-ticket loan. For example, Bajaj Finserv Loan Against Property offers a sanction of Rs. 10.50 Crore*, and even higher if you’re eligible. You can repay this via a flexible tenor spanning up to 15 years. Also, being a secured loan, the interest rates for this loan are cost-effective as compared to unsecured loans.
Additional Read: 4 factors that affect the interest rate for Loan Against Property
Loan against property eligibility criteria
To qualify for a loan, lenders require you to meet certain eligibility criteria that reflect your creditworthiness and repayment capacity. Though these criteria vary across lenders, the following are the common parameters based on which you can qualify for the loan:
- Your age
- Your income
- Your credit score
- Your existing debts
- The property’s market value
To qualify for a Loan Against Property on simple eligibility terms by submitting minimal documentation, you can apply with Bajaj Finserv. Then, check your pre-approved offer to view your tailor-made deals and expedite your finances.
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