What are Some Important Things about Loans against Property?

Posted on Tuesday, April 4th, 2023 | By IndusInd Bank

Critical things to bear in mind about a loan against property pertain to valuation and ownership of the property, loan pre-closure, repayment tenure, and loan processing & additional fees. Unlock the value of your property and reap several benefits with a loan from IndusInd Bank.

While it is good to be mentally ready for the surprises life throws at you, financial preparedness at all times is scarcely possible. There may be situations in which you need a large amount of money in one go, and you do not find an unsecured loan suitable for various reasons. It is under such circumstances that a loan against property can come in useful, and help you fulfil your monetary needs.

What is a Loan against Property?

A loan against property essentially means placing your property, residential or commercial, as collateral to gain access to a large sum of money. The loan funds can be used for varied purposes, ranging from a medical emergency to setting up or expanding a business. Both salaried and self-employed individuals are eligible for this loan. Since this is a secured loan, the loan against property interest rate is usually lower as compared to a personal loan or business loan.

Important Things to Know about Loans against Property

If you are planning to take out a loan against property, here are 5 points you should bear in mind:

1. Valuation of the Property

Banks and financial institutions evaluate your property, providing only a certain percentage of the property’s current market value. Depending on the lender’s policies, you may be able to avail of a loan amount equal to up to 60 percent of your property’s market value.

2. Ownership of the Property

It is mandatory to present all ownership documents to a lender to prove that you are indeed the owner of the property. Further, all co-owners must be made part of the loan. It must be noted that you do not need to move out of your home after you have taken out a loan against property. In fact, you retain ownership of the property throughout the tenure of the loan.

3. Option of Pre-Closure

As the borrower, you have the option of pre-closing your loan before the end of the tenure. If you obtained the loan on floating or variable interest rates, you will not be required to pay any charges for pre-closing the loan.

If your loan came with a fixed interest rate however, you may be charged 4-5 percent of the outstanding loan amount as pre-closure penalty.

4. Repayment Tenure

Loans against property typically come with long repayment tenures, enabling you to comfortably pay back the loan. What’s more, the tenures are fairly flexible, ranging from 1 year to 15 years.

5. Loan Processing & Fees

Compared to some other types of loan, a loan against property calls for simple documentation. Moreover, being a secured loan, the process of approval and disbursal is usually quick. However, in addition to the applicable interest rate, this type of loan may involve a few other charges such as loan processing fee and mortgage stamp duty among others.

Why Choose IndusInd Bank for a Loan against Property?

Regardless of whether you need funds for personal or professional purposes, IndusInd Bank offers some of the best loan against property solutions to help you unlock the hidden value of your property. Some of the benefits of obtaining an IndusInd Bank loan against property are as follows:

Ø  Attractive loan against property interest rate

Ø  Simple loan against property eligibility criteria

Ø  Doorstep banking services and assistance

Ø  Customized repayment tenures ranging from 1 to 20 years, depending on your repayment capacity

Ø  Disbursal of a high loan amount for various needs like educational purpose, business purpose , medical expenses etc.

Ø  Availability of overdraft facility

The prospect of pledging your property can be daunting. However, it is worth mentioning that a loan against property is one of the most popular types of loan, not least on account of factors like relatively low interest rates and long repayment tenure.

Unleash the real value of your property with an IndusInd Bank loan against property today!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.