Loans are one of the best ways to achieve your dreams. Out of many, loans against properties are the ones that have seemed lucrative in recent times. It can help you get the money you need to invest in your venture or cover your personal needs. Do you also want a property loan in a place like Mumbai? Keep reading to learn more about these kinds of loans.
To obtain this loan, you must pledge your property. We will find out various factors, benefits, and downsides of a loan against property in this article.
This article is dedicated to the loans against properties, their features, benefits, and the reasons to go for them in Mumbai.
What is the correct description of a loan against property?
As mentioned, A loan against property is a loan you take from a lender by pledging your assets. You use a property as a medium of guarantee between you and the lender to make sure you repay your loan. The lender keeps your property unless you completely repay your loan. This property could be your house, a flat, or even a piece of land that has a market value.
The lender charges you a rate of interest on the principal amount for a set period in return. You must repay your loan within this time limit through monthly instalments, as directed by your lender. In India, there are several banks and private financiers that provide you with property loans at different interest rates. The correct market value of your property determines your loan amount, interest rate, and repayment tenure.
Mumbai: As the location for a loan against property.
Popularly known as the “dream city” of the country, Mumbai stands as a huge source of revenue generation. It adds approximately $600 billion to the country’s overall revenue, which is daunting. Being the hub of entertainment, cinema, fashion, and trade, its contribution to the GDP is about 6.2%.
With that level of economic activity, it might seem quite tough to get a loan against property in Mumbai. But with the correct know-how and the right approach, you can easily crack this nut and get a property loan.
What are the benefits of having a loan against property in Mumbai?
There are several benefits to availing of a loan against Mumbai property, some of which are listed below.
- Attractive interest rates:
Interest rates on loans against property in Mumbai are quite low, so you can easily pay off your debt in small, easily repayable instalments. In Mumbai, the rate of interest starts at 9.50% per annum, which is an ideal number. The interest rates also depend on your credentials, like your credit score, loan history, etc., and your bank’s offers.
- Disbursal within 3 business days:
Once all your documents are verified and you get the bank’s approval, you will get your property loan amount within 3 business days. This process can even be faster, provided your bank gets done with the verification process as quickly as possible.
- Huge value funding:
Depending on your credentials and eligibility, the loan amount is decided by your banks. You can get as high as 5 crore rupees, or even more if the bank finds you the perfect candidate for this loan.
- Convenient tenure of repayment:
The tenure of repayment in many cases for a loan against property is high so that you can conveniently repay your loan amount through instalments. The tenure can often be stretched to 20 years or even 30 years, depending upon the maximum limit of the bank.
- Low EMI per lakh:
For every lakh, the EMI amount is low for property loans in Mumbai, which stands as a huge advantage for you. The lowest EMI per lakh for 30 years starts from 750 rupees onwards for a loan against property in Mumbai.
For instance, the State Bank of India charges INR 812 for every lakh, HDFC charges INR 769 for every lakh, PNB charges INR 787 per lakh, and Axis Bank charges INR 870 for every lakh. Similarly, many more banks charge similar rates for a loan against property in Mumbai. Visit all the websites and compare all the options to find the best fit for you.
- No prepayment or foreclosure charges:
If you want to prepay your instalments, your bank will not charge you any penalty. Also, if you want to close your loan accounts before the maturity period, in that case, your bank won’t charge you any extra fees.
What are the eligibility requirements and documents needed to apply for a loan against property in Mumbai?
You must fall into the age range of 25 to 70 years and either be a salaried or self-employed individual. You should have a work experience of about one year and a credit score of 750 or more to avail of a property loan in Mumbai.
You must show your ID proof, address proof, and a copy of your property documents. You should have your latest salary slip (for salaried individuals), bank statements (last 3 months), and IT returns (for salaried individuals) as well.
In many cases, a loan against property is an ideal choice, especially if you want to invest that money in growing your business. However, sometimes, for personal uses like purchasing a house or a flat, you can also do so. You can use property loan calculators and compare different interest rates before deciding on the best option.