A property loan in India is one of the safest loan options. It lets us use the value locked up in a property while still using the property while the loan is in effect and being paid off.
A property loan or loan against property can go as high as INR 5 Crores if you match the lender’s qualifying requirements, making it a cost-effective solution to pay your demands. But just because you borrow a lot of money doesn’t mean that the interest rate will be high. Property loans offer excellent rates, allowing you to meet your financial needs without compromising your investment ambitions.
For a loan against property, the criteria that borrowers must meet are clear and simple to comprehend. This means that you can finish the loan application and verification process in just a few days and also get your money quickly.
Read on to learn more about the benefits of a loan against property and how to apply for one.
Advantages of Property Loans in India
The following are some of the benefits of a property loan in India.
Substantial Loan Amount
You can borrow up to INR 5 Crores with a property loan, depending on your demands and finances. This large amount can help pay for a variety of costs, such as the cost of growing a business.
Lower Interest rates
You can acquire excellent interest rates and reasonable EMIs by securing a loan with your property. If you prepare ahead, you may be able to get a low-interest property loan.
No end usage restrictions
Since there are no restrictions on how the loan money has to be used, one can use the funds availed of to meet all kinds of personal and professional needs.
Factors Affecting Property Loans
When people decide to get a loan for a property, they must get an understanding of the crucial factors that affect property loan interest rates.
Property Type
If you want to borrow money against a property, you must have the property registered in your name. Your loan value and interest rates would also depend on the type of property you own, residential or commercial.
Loan-to-Value Ratio
The loan-to-value (LTV) ratio tells the lender how much money the applicant is eligible for. The lender decides this by looking at your property’s construction, infrastructure, amenities, and market value.
Repayment Term
When getting a property loan, borrowers can take advantage of long property loan tenor that can last up to 20 years. This makes it easier to pay back the loan. To properly plan your payback schedule, use a loan against property EMI calculator.
Eligibility for Property Loans
Every lender has its own set of rules about who can borrow money. To get their loan request approved, applicants must meet these requirements. You can also use a property loan eligibility calculator. Some common eligibility requirements for a loan against property are discussed below.
For Salaried Borrowers
● Applicant must live in India and be an Indian citizen. Further, the property they wish to mortgage must be in the cities where the lender has branch offices.
● They should ideally be between 25 and 60 years of age. Note that the maximum age is considered when the loan comes due.
● They must be working in the public or private sector or for a multinational company and have at least three to five years of work experience.
● The preferred minimum salary range can differ from city to city, but it’s usually between INR 25,000 and INR 35,000
For Self-Employed Applicants
● The applicant must live in India and be a citizen of India. The property must be located in a city where the lender has a branch office.
● They should ideally be between 25 and 70 years old. Note that the maximum age is considered when the loan comes due.
● Applicants must have been managing their business for at least five years.
● Their minimum earnings should be somewhere between INR 25,000 and INR 35,000. The range of income could be different in different cities.
Property Loan Documents Required
If you want to use a property as collateral for a loan or you want to opt for a property loan balance transfer, you must have the following documents:
Salaried individuals
● PAN card, Aadhar card, passport, voter’s ID, or driving license as proof of identity
● Aadhar card, voter’s ID, passport, ration card, or utility bills like electricity bills can be used as proof of address
● Property documents include the title deed and paperwork to prove mortgage and ownership
● Form 60
● Proof of employment in the form of the ID card issues by the employer
● Tax returns of last 3 years
● Last two months’ pay slips
● Last three months’ bank statements
Self-employed
● Proof of business documents, such as a business registration certificate, a partnership agreement, etc.
● Tax returns from the last two years as proof of income
● The company’s balance sheet, profit and loss statements
● Last six months’ bank account statements
Final Thoughts
Applying for a property loan in India is a big decision, so it’s a good idea to use internet tools like loan against property EMI calculator and property loan eligibility calculator to research your options and determine if you’re a good candidate for a property loan before applying.
