Unexpected financial emergencies can be very stressful, as in order to meet these emergencies you go for your savings or you ask your close friends or family. But sometimes you feel obnoxious to do so. This is where loan against property comes in.
Loan against property is a form of secured loan, where you need to provide collateral to the specific lender where you are applying. This means that in order to get the loan amount you need to mortgage your owned property to the bank, be it your residential property or your commercial property or even your industrial property, but the deal breaker over here is just that the property should be OWNED.
The loan amount here is given on the basis of your property value in the market and around 50 to 60% of your property value is considered. There are various purposes for which you can use this category of loan, be it to fund your child’s education, or for any medical emergency, or planning for a dream vacation or even to plan your Childs wedding. Now let’s see how this loan is beneficial for you:-
1) Lowest interest rates- Loan against property offers with you variety in interest rates. As being a secured loan, the rate of interests over here starts from 12-14% and are negotiable, depending upon banks to banks.
2) Longer tenure-Another benefit of loan against property is that, the tenure which we get in order to repay the amount is up to 10- 15 years, depending upon the bank or financial institution you are applying. Longer tenures lessen your burden of monthly EMI’s.
3) Easy to avail-Unlike any unsecured loans, secured loans are generally easy to avail, as you are required to give collateral to the bank as security, this means that if you default any payment then bank can take the possession of your collateral which you have given. This is the benefit of secured loans that you don’t have to wait for many days to get the approval.
4) No prepayment charges- In unsecured loans, there is up to 3-5% of prepayment charges which are involved. But in the of loan against property, being a secured loan, offers no prepayment charges, you can close your loan by making prepayments toward your property.
5) Lower EMI- The major benefit which we get in loan against property is that of the EMI. As we have the facility of longer tenure, and due to that we get the benefit of lower EMI, so that people can easily pay off the loan with less burden.
