There is an increasing demand for loans against property in India as people require funds to start their business or to manage their children’s education and getting a loan against property is much easier than any other form of loan provided by a financial institution. On the other hand, there are also a good number of people who were not able to manage expenses for the development of their new home after buying land so they managed to raise Loans by way of loans against property against their land to construct their house of the property.
Under loan against property, the launch can be extended from any financial institution against the property which can be either residential or commercial or can be just plotted, and this type of loan is usually granted for an amount greater than 10 lacs to up to 10 crores.
For an applicant to avail loan against property, e has to be sure that he holds all the title and possession of the property and accurate documents of the property before raising the loan from any institution.
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In case you do not want to take the burden of filing different processes of personal loan or business loan for any other asset loan you can simply apply for a loan against property without much hassle if you own a property which is of no use to you or use of nil usage the way you can apply for a loan against property in India has just been described to you in this post.
What is Loan Against Property?
For those who want to buy a new property, it is very important to know that what is the actual amount to be spent to buy such property and to check whether there is an existing mortgage on that piece of land or property you are going to purchase. In the banking channel, you can only raise a loan against property, if the property is owned by you or any of your family members.
In simple words loan against property can be understood in a way that is a loan which is provided against some land or plot of Land by banks or financial institutions the property is kept as an asset by the bank against such loan in case the borrower fixed deposit in payment of the loan the possession of the property will be transferred to the bank.
A loan against property can be obtained from a banking institution or any private lender, if it is taken from any bank it can only be used for the particular reason of either construction of the land or plot mortgage with the bank or buying or construction of any other property while if it is taken from any private lender there is no such restriction of using the fonts in a particular project or any property it can be used any way an as required by the borrower. The entire power of utilization of the funds comes in the hand of the borrower.
Loan Against Property for Child Education
Sometimes there are also some other specific reasons for which you can obtain a loan against property such reasons are also to be provided to banks of the financial institution before applying for a loan. Loan against property for child education the loan is taken by the borrower to meet his emergency financial need like paying off children’s education fees education visa for getting entrance into a big medical college or any other college.
You can easily obtain a loan against property for child education from the bank when you have no cash available in hand, also while availing the loan you have to fulfil some criteria of the banks and have to provide the bank with all the necessary details about the child educational expenses incurred at the college are the educational institution applied for and the time of repayment of the loan by the borrower.
What general rules are to be followed before applying for Loan Against Property in India?
A loan against property is a secured loan issued by a bank generally interest rates on these loans are low and they are less prone to the risk of default or repayment problems so so it is easily provided to a borrower against the Collateral provided on the other hand the borrower has to keep up with the rules provided with the banks in order to keep his Collateral property safe with the bank against the loan :
Firstly you have to maintain a good credit record and based on your past credit history you will be granted a definite amount of loan from the bank against your property so it is better to keep your credit history in good health.
Secondly, sometimes Bank so so asks for a second security e is such property e does not value much at the time of sale or at the time of default of the borrower so banks also ask for security So being a borrower you should also hold some other security before applying for any loan against property.
Third, you have to be clear in the policies and terms and conditions of the lender before applying for the loan in order to avoid any future problems it is advisable to get a proper understanding of the entire loan document with the loan advisor and all loan agent of the bank.
Forth, no banking Institution or financial institution grants loan against property to companies or societies registered why it is only available to individuals who hold the position of land or property provided as collateral to the bank the general rule applies to the bank that before applying for any loan against the property if the property should be vacate of all the tenants and it should be clear in all respects.
Properties with Highest Collateral Value in India
Before allowing a particular amount or defining a particular amount of loan against any property the banks also provide specific guidelines on deciding on making the price calculation for landing against certain properties after the raw Research and Analysis the banks provide loans based on the current market price or value of the property considering the account interest rates that transaction cost involved and the risk associated with the property :
Here is a list of the most attractive properties against which loans against property can be secured easily from any bank :
1) Residential Property (New)
2) Residential Property (Old)
3) Commercial Property
4) Farm House/Farm Land
What is the Rate of Interest Charged on Loan Against Property in India?
The rate of interest charged on loans against the property by any banking institution where is from bank to bank some time is it is often provided at lower interest rates depending upon the economic problems and rules and legislation of government also it is provided at a more discounted rate when the credit history or repayment capacity of the borrower is good. A borrower with a bad credit history finds difficulty in raising a loan against property at minimum rates.
Generally, the rate of interest charged on loan against property is between 10 to 20% the main reason behind this is that loan against property is generally risky for the banks as the value of the property does appreciate or depreciate as well as charging a higher rate of interest on such loans is enough for the banks to get compensated for any of the laws they are going to to take in case of default by the borrower.
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Penalties for Repayment of Loan Against Property
As said above it is a loan against property, in case of any default by the borrower the lender may charge a higher interest rate on the principal amount along with the current rate of interest also he can penalize the borrower by adding to it more panel charges. Secondly, e the lender has the option to either put the property into auction or resale to recover his money or to acquire the property to have its possession.
Some lenders finalize in a way that they provide an additional Grace. to fit the application of additional panel interest on the amount accrued till that date. Or he may provide an optional additional fee on the outstanding amount.
It is an atlas with all options above adopted the land imago on for legal action against the defaulter where additional Grace. is the borrower to repay the loan or else in case he has to turn to handle court case against him.
Popular Banking Institutions for Loan Against Property
It is not that easy to take a loan against property for any private lender you have to fulfill a number of Publications and have to keep up with all the documentation required by the private lender. While for securing a loan against property from any public Bank RBI has made it mandatory for are the banks to fulfil the norms of basil 3 aware while granting any loan against the property they have to consider the rules guided by the Reserve Bank of India is a list of top banks offering home loans for loan against property in India :
- HDFC Bank
- SBI Bank
- IIFL Housing Finance
- Axis Bank
- Muthoot Fincorp
- Punjab National Housing Finance
- Axis Bank
- Central Bank of India
- Corporation Bank
- Deutsche Bank
- IDBI Bank Ltd
- Indian Overseas Bank
- Oriental Bank of Commerce
Generally, public banks or banks with control of the government provide loans on secured and high-value properties like residential houses and Farm Houses while also these do not provide loans against agricultural land wastelands or lands with dumping yards.
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How to get Loan Against Property Without Income Proof?
Generally, a loan against property is given to any person to you either buy a new house a new land or meteor fulfil the construction needs of existing property or do we should purchase once you open the loan against property the property held with the banking institution kept as collateral so in most cases the borrower receives the funds from the bank without providing any income proof as rule security of the Asset in hand.
You can only get a loan against property without income proof in certain cases where you have a good income history for tribute history Le but word not be requiring any income proof to be submitted to a bank before applying for a loan against property.
If you receive your salary slip from your job and have no other income sources such salary slip can also work as income proof to the bank before applying for any loan against property.
You can also receive a loan against property in case you hold an investment in equity or other Assets and are willing to mortgage them with the bank also.
Calculation of Interest on Loan Against Property
The calculation put up for loan against property is different from that calculated for any other type of loan, here is how you can calculate your interest payable on a loan against property obtained from any bank :
Suppose you have taken a loan of 80 lacs for a. of at a rate of interest of 10% the principal amount is 80 lacs whether the total amount payable by you would be about 89 lacs in 10 years,
The interest paid on a loan against property can be calculated by using the following formula:
Interest = Principal + Interest Paid in Previous Period.
Where,
Interest is the interest payable for one period.
The principal is the principal amount borrowed.
Interest Paid in the Previous Period is the amount of interest paid in the previous period.
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Conclusion
To apply for a loan against property you can give an application with all the property documents on the above banks. On an essential note, you should require all the property documents in a good format. If you require assistance in obtaining a loan against property from any bank you can share your queries in the comment section बिलो।
