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All You Need To Know About A Loan Against Property - From Interest Rates To Eligibility

  • Highlights

  • Your property acts as security in a loan against property

  •  Repay a mortgage loan on competitive interest rates

  •  Qualify for the property loan basis easy eligibility terms

  • Access a high-value sanction instantly with Bajaj Finserv

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 are offering innovative financial products to cater to your evolving needs. Among other loans, 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 a property is involved, this loan 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 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. This is because under a reverse mortgage scheme, you are required 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.

Home Loan EMI calculator

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 piece of agricultural land or any other open space you own in your name.
  • 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 60% to 80% 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 up to Rs.5 crore. You can repay this via a flexible tenor spanning across 2 to 20 years as a salaried person and up to 18 years as a self-employed individual. Also, being a secured loan, the interest rates for this loan is 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

In order 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, 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. Check your pre-approved offer to view your tailor-made deals and expedite your finances.

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The material contained in this site and on associated web pages is general information and it is not intended to be advice on any particular matter. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. The decision with respect to any financial product or opportunity or nature or suitability or choice or the viability of any product or service shall always be sole responsibility and decision of the subscriber and user.

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