A need for money can arise at any point in time. Though, it is possible that you may not have enough savings to help you tide through. This is where you must explore the option of raising funds from an external source. You can apply for a property loan based on the amount you need. To avail of this loan, you must own a property in your name, and it should be free from any lien.
A loan against property is secured, as you must pledge your asset (land or house) with the lender. Many banks and NBFCs offer this loan at low-interest rates, for they have lesser risk here. You can use the money for any needs you may have, as the lenders have no rules to restrict the usage of the loan amount. The interest rate on this loan is low compared to other loans, as it is a secured loan. There is no upper limit to the money you can raise as a property loan. Many lenders offer up to 5 crores as a loan against property based on your profile.
Read on to learn about things you must take care of when you apply for a property loan.
How to Apply for a Property Loan?
You can apply for a loan against property with any bank or NBFC you prefer. Here are the steps you need to follow to apply for a property loan:
- Do your research and find a suitable lender whose offer meets your needs. You can find details about property loans on their website.
- You must then visit the website or the lender or use a mobile app per your preferences.
- You need to click on the link for ‘Loan Against Property’.
- You must find the link for ‘Apply Online’ and click on it.
- You now need to enter your personal details such as name, age, income, contact details etc.
- As this loan involves property, the process cannot be finished online. Hence, a team member from the lender will contact you.
- You need to fill out the loan form, provide the papers, and complete other formalities as the need may be.
- Then the lender will send a valuer to verify your property. The valuer will also decide the property’s value per the present market condition.
- You will be given a loan offer if your credit score and profile meet the lender’s rules.
- Most lender offer between 60% to 80% of the property value as a loan against property.
- You will need to submit the original papers of the property to the lender.
- You must sign the loan agreement if you agree with the offer. You will also need to sign the mortgage register. This would help the lender create a charge against the property.
- Then the lender will send the money to your bank account. You will also get the loan schedule and other details on your email id.
- You can now use the money as you prefer. You will need to pay the EMIs as per the loan schedule.
Crucial Facts Related to a Property Loan
Before you apply for a loan against property, here are some crucial facts that you must know:
- Tenure: A property loan comes with a long tenure. Most lenders will offer you up to 20 years to repay the loan. This will allow you to get an EMI amount you can easily afford every month. But while opting for a loan tenure, keep in mind the interest cost. The longer the tenure, the higher the interest cost and vice-versa. So, select an EMI amount you can afford that will keep the interest burden under control.
- Property: You can get a property loan against a commercial or residential property. But the property must be in your name and free from any lien. If the property is not in your name, you must get the owner as a co-applicant. Keep in mind that the lender will conduct a legal and technical study of the property. So, you must be sure about all the facts and share them with the lender upfront.
- Interest Rate: Every loan comes with an interest cost. The same is the case with a property loan. Though, it is vital to note that it is a secured loan. Hence, the interest rates are lower. You can get a loan against property from as low as 11.5% per annum. Low-interest cost means lower EMIs which further reduces the chances of any default on a loan.
- Loan Amount: A loan against property is a high-value loan. The maximum amount you can get as a loan is related to the property’s value. Most lenders offer up to 80% of the property’s value as a loan. This means you can easily get as high as Rs. 3 crores as a property loan. There are no limits on how you can use this loan. But make it a point that you borrow only that much you need and can repay. Do not get into a debt trap by going for the maximum amount. Some lenders may also offer this loan as a line of credit. Herein, you will need to pay interest only on the money you use and not the entire amount.
A loan against property is a good way to meet your urgent money needs. It is vital to select a lender that will give you the best offer in terms of a high loan amount, long repayment tenure, and low-interest rates. This is where Piramal Finance emerges as a leading option. It is a leading NBFC that offers the best offers on a property loan to help you meet all your money needs.