Thinking about Loan against Property-Must Know Benefits

Thinking about Loan against Property-Must Know Benefits

By siliconindia   |   Monday, February 23, 2015


Even if you are fussy saver, there may be fiscal troubles and you need financial help for improving your business, your child marriage or for sending your children for higher studies. The first thing that would strike in your mind is Loan against property. Leveraging an asset you own is a better option to fulfill your financial need in time of necessity. However, before acquiring the loan against your property, knowing the benefits available is must.  

The loan against property can be used for various purposes such as children wedding, setting up a new business, business expansion, medical purposes and Investment in commercial property and any other priority. Here are the few benefits of Loan against Property.

Cheaper Interest Rates:   

This is one of the most important benefits available for the borrower of a loan against property. As it is a secured loan, compared to a personal loan or credit card borrowing, the interest rates are lower. The loan against property interest rate ranges from 11.5 percent to 13.75 percent, where as personal Loan rates are 16 percent to 20 percent. The released funds can be used for various purposes without notifying to the lender.

Longer Tenure of Repayment:

A loan against property offers a longer tenure of Repayment up to 10 to 15 years. This feature reduces your EMI burden. When your income stream is not sturdy, this feature makes the option more alluring.

Easy to obtain

Once the essential security is available, obtaining clearances for the loan against property is much easier. If you have a property which is free from mortgages as a security, you will not take much time for the entire loan clearance as the terms related to loan against property will make sure the practice is completed without any wastage of time.

Use of Idle Property:

If you own a property, that is lying unused for a long time; difficult to raise the funds from the property and not beneficial at any circumstance. In such case you can get an opportunity of optimal utilization. Without losing the ownership can ensure the best use by acquiring a loan against the property at lower interest rates.

Security:

The presence of a property serves adequate security feature for the loan. Like other assets, the property does not witness a massive reduction. With time passing, the value of the property actually arises and it proves to be a security for a loan.

Offers continuous Ownership:

After acquiring the loan, if you are not in a position to pay the loan amount, to continue the ownership you have an opportunity. Being as a borrower, you can sell the property and settle the loan amount. Furthermore, this will also allow you to restart the financial life with surplus cash.

Larger Loan Possibility:

Larger Loan possibility is other benefit which you can gain from Loan against property. Depending up on the property and its value, the lenders allow flexibility to you. If you required a large amount which you can’t attain from any sources can raise the necessary amount of funds. There is no major restriction as long as you serve the loan against property.

Availability to acquire a loan on mortgaged property:

You can also acquire a Loan against property on an asset which you have already mortgaged. If you have acquired a home loan on a property, the same property can be used to take a loan against property. But, few restrictions are applicable.

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