Loan against Property – Features & Benefits
Often, to get something, you require letting go of something, but that is not the scenario with LAP (loan against property). While you provide a property as security or collateral to avail of the loan, you can continue staying an owner and using the property. However, you must ensure to service the EMIs of the loan against the property in full by the due date. So, with an HDFC loan against property, SBI loan against property or loan against property through other lenders, you can get a loan against property or residence and even meet your financial needs without letting go of the property’s possession or ownership.
So, if you need any financial help and want to know more about LAP (loan against property), plot loans, and different benefits of loan against property, read on.
What’s a loan against property?
A loan against residential plots, property or a mortgage loan is nothing but a financial tool that allows you to use the property value by putting it up in the form of security or collateral to get the funds from a financial institution. It is a secured credit option that offers considerable funding or loan against property, which you can repay over flexible repayment tenure. Few of the non-banking financial companies offer loan against property with a tenure of as high as 15 years. Let’s go through the different benefits and features of a loan against a plot or property.
Loan against property – benefits and features
Higher loan to value (LTV) on market value
You can get a higher LTV (loan to value) ratio based on the property’s market value, which means higher loan proceeds to finance your requirements.
Quick and simple loan processing
Most of the LAP lenders offer a quick, hassle-free and stress-free process. If you mitigate the basic eligibility parameter and offer the right documents, your experience of loan processing will be smooth.
Also Check: SBI Loan Against Property
Minimal documentation
Long gone are days of endless paperwork and long queues. An easy online application for a LAP includes just basic paperwork, which saves you plenty of energy and time.
Competitive rate of interest
Always select lenders who provide a competitive rate of interest and fees on your LAP (loan against property). Further, this will ensure you hold a budget-friendly EMI, which you may be able to pay on time with zero impact on your thorough financial goals.
Transparent processing
Transparent loan processing experience forms a sense of reassurance and trust. Every fee or charge during the procedure is communicated swiftly to you as a customer during every stage – right from the application to the loan disbursement, ensuring there are hidden charges involved.
Higher repayment tenure
Loan repayment becomes simpler when you can easily afford to repay your loan EMI on time. You can get maximum loan tenure of as high as 15 years to repay your loan against property with zero hassle.
Foreclosure fees
You can now foreclose your home loan well in advance with zero need to incur any high fees. Lenders charge an affordable foreclosure fee on the outstanding principal constituent on your loan against property.
Doorstep service
You can opt for a loan against property at your convenience. Many bank lenders provide doorstep services to make it simpler for you to place an application for a loan.
Loan amount
You can get high-value proceeds that range between Rs 25 lakh and Rs 10 crore as LAP.
How do you get the loan against the property option?
To get the loan against property, you must go through a stepwise approach. First, ensure that you fall into any of the 3 categories. These include –
∙ Any salaried person is working with private or public limited companies.
∙ Director, partner, proprietor, and self-employed individuals like company secretaries, chartered accountants, and doctors.
∙ Partnership or private companies engaged in servicing, manufacturing, or trading.
Eligibility parameter for LAP (loan against property)
Fundamental eligibility parameters to get a loan against property involve –
∙ Age – Minimum age for a self-employed and salaried person or a key director/ key partner or proprietor must be 22 at the time of placing a loan application. In case you are salaried, then your maximum acceptable age to submit the application for a loan against property is 60 years. However, in the case of self-employed or proprietors, the maximum age at the time of loan maturity should usually be 75 years.
∙ Business vintage or work experience – Salaried persons must have three years of overall experience and one year with their present employer. Self-employed experts must be in the same profession or business for the past three years. Companies must have at least three years of business vintage.
∙ Income – Net monthly take-home income for the salaried must be at least equivalent to Rs 25,000. For the self-employed, the gross annual income must be at least Rs 3 lakh. For the companies, the annual turnover must be roughly Rs 10 lakh.
∙ Citizenship – All key stakeholders must be Indian citizens.
What are the important documents required for a loan against property?
∙ Identity documents – If you are self-employed or salaried, then you must provide a copy of your Aadhaar card and PAN card. The company and firm must provide their company PAN card, registration certificate and various other registration documents alongside KYC of directors/partners’ Aadhaar card and PAN card.
∙ Income documents – If you are a salaried person, then you must provide your past 3 months’ salary slips. You, as a self-employed individual, must offer ITR (income tax returns), P/L (profit and loss) statements and your latest two years’ balance sheet. Companies/firms must provide all the crucial documents along with GST returns.
∙ Address proof – As address proof, you must provide your electricity bill for the owned premises, a rent agreement for the rented premises and passport information.
∙ Financial documents – You, as a salaried, must offer salary credit account statements for the previous 12 months. Self-employed must offer operative bank statements for the past 12 months.
∙ Property documentation – This must be provided if documentation is finalised already, along with the property’s technical and legal clearance.
