Thanks to the high-value loan amounts that a loan against property offers, you can use it to finance various needs. With no end-use restrictions, the loan finds its application in a range of personal and professional financial requirements. This alone establishes the popularity that a loan against property is gaining. Read on to know more.
What is a loan against property?
Your property becomes collateral when you opt for a loan against property. Meaning, the lender accepts it as security against which you get the loan amount. This is also called a mortgage loan, and you can either pledge a residential or commercial property to obtain it. With the property being at the heart of a mortgage loan and home loan, some borrowers may not find a significant distinction between the two. However, in contrast to a home loan, mortgage loan meaning and functions are different. Read on to understand this in detail.
What is a mortgage loan?
In case of a mortgage loan, you are required to pledge an existing property to access funds to address a variety of expenses like education, wedding expenses, car purchase, and more. You can pledge:
- Residential property
- Commercial property
- Self-occupied property
- Let out property
Depending on the property you pledge, the lender offers you a loan of 75% to 90% of its market value. After understanding mortgage loans in India, read how to apply for a loan against property so as to expedite your approval.
How to take a loan against property
Follow these simple steps to avail a loan against property:
- The interest rate, loan-to-value ratio, and other features vary across lenders. Therefore, comparing loans offered by various lenders is important to bag the best deals. For instance, a Loan Against Property provided by Bajaj Finserv offers loan amounts of up to Rs. 10.50 crore* per eligibility at affordable interest rates. For the salaried, the maximum tenor stretches up to 15 years whereas it goes up to 15 years for the self-employed. What’s more, you can make significant interest savings by opting for the Flexi Loan feature that lets you borrow as per your need and pay interest only on the used amount.
- Before approving your loan, lenders require you to meet certain eligibility criteria that help them evaluate your creditworthiness and repayment capacity. These criteria vary across lenders. So, ensure that you meet them to qualify for the loan and fasten your loan approval.
Following are the common criteria:
- Your age
- Income and savings
- Credit history and score
- Existing debts
- The market value of the property
- Next, note the documents required by your lender and gather them. Submitting the documents in a single go also fastens your approval.
Following are the common documents required for a LAP sanction:
- Income proof: Latest salary slips, bank account statements, ITR
- Identity proof: PAN Card, Aadhaar Card
- Address proof: Copy of the property documents
Additional Read: How To Apply For A Loan Against Property: A Step By Step Guide
To expedite your application process, check your pre-approved offer from Bajaj Finserv to view and benefit from our tailor-made deals. All you need to do is submit basic details like your name and contact number. Once you receive your offer, submit your application and enjoy instant approval.
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