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What are the Facts to Know about a Loan against Property?
Posted on Tuesday, December 13th, 2022 | By IndusInd Bank
A Loan Against Property is a great way to obtain immediate long-term funds. However, before applying, a borrower should be aware of certain facts pertaining to the property and loan.
Loan Against Property is a secured loan or a mortgage loan in which an individual or company pledges their residential or commercial property in exchange for a loan. The pledged property remains as a collateral with the bank until the entire loan amount is repaid. This type of loan is ideal for people who need immediate funds for various purposes such as expansion of a business, children’s higher education, or establishment or, a medical emergency, among others. The borrower continues to be the lawful owner of the property all through the loan tenure while repaying the amount in comfortable EMIs.
Facts you must Know about a Loan Against Property
If you are planning to take out a Loan Against Property, here are some facts you should be aware of.
| Facts pertaining to the Property | Facts regarding the Loan |
| If the property to be pledged is owned by more than one individual, all legal owners must jointly apply for the Loan Against Property. | Factors such as the applicant’s age, credit score, income, and employment status have a bearing on the loan amount. Borrowers with a poor credit score, or no regular source of income may find it difficult to get their loan application approved. |
| The loan can be sought against a self-occupied house or one that has been rented, vacant property, a commercial property. | The loan amount can be used for multiple purposes, ranging from business expansion, purchasing another property, and wedding expenses to healthcare expenses. |
| Banks and lending institutions typically take into account the property’s age and overall condition. As a rule, the older the property, the lower the amount of loan sanctioned against it. | Loan Against property has a few distinct advantages such as relatively long repayment tenure – up to 15 years – and higher loan amount. |
| As a borrower, you should ideally have all important property documents in place, such as the title deed and building blueprints, when approaching a lender. | In addition to the interest, other charges such as processing fee and stamp duty may be applicable on the loan. |
| Banks may sanction a loan amount of up to 65% to 75% of the market value of the mortgaged property. | A Loan Against Property calls for minimal documentation; processing and disbursal of funds are usually quick. |
Get a Loan Against Property at IndusInd Bank
IndusInd Bank’s Loan Against Property solutions are designed to unlock the hidden value of your property. With a quicker turnaround time, this loan could help you raise immediate long-term funds, ensuring you are able to meet all your business and personal expenses in one go. Additionally, you get to enjoy distinct benefits such as Higher loan amount, Higher tenure and attractive Loan Against Property interest rates.
The documentation required for a Loan Against Property is rather basic. To start the process, you will need to furnish your KYC documents, photographs, proof of income, bank statement, property documents, and application form along with the processing fee cheque. You may apply using any of the below-mentioned options:
- Apply online, filling up the online application form
- Use phone-banking for assistance
- Visit your nearest IndusInd Bank branch
- Contact your relationship manager for more details
At IndusInd Bank, borrowers may also avail of variants of a Loan Against Property such as additional finance, balance transfer – transferring an existing loan at a more attractive Loan Against Property interest rate – and lease rental discounting. Apart from salaried individuals and self-employed professionals, proprietorship concerns, partnership firms, and Private Limited Companies too may apply for this loan type.
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.
