For some, buying a house is a necessity; while for others, it is an investment.
Whether you wish to buy a new house for living with your family or want to invest in it to reap rich dividends, a loan against property can provide you with funds quickly, so you can purchase a new house easily. A loan against property enables you to encash the dormant value of your asset, which you may use to buy a new property.
But, why will you apply for a loan against a property when a home loan is available with the lowest interest rates?
Reasons You Should Avail a Loan Against Property For Buying a New House
If you compare a home loan with a loan against property, you will observe that, in essence, both are mortgage loans. Both accept your house as collateral security and gives you money. But, while a home loan gives you funds solely for constructing or purchasing a house, a loan against property gives you funds for all purposes. Hence, unlike a home loan, you can also use the loan against property funds for funding anything related or unrelated to house purchase.
Another factor that makes a loan against property easily accessible is the eligibility criteria. While the home loan eligibility criteria are strict, loan against property eligibility criteria is much simpler. In some cases, you can still apply for a loan against property with the lowest interest rate if you cannot produce income proof and ITR, and do not have a credit score above 750, which is usually the bare minimum in the case of a home loan.
Hence, wise borrowers often rely on a loan against property with lowest interest rates to purchase a new house, as it saves them more money in the long run than a home loan.
The Application and Approval Process of a Loan Against Property
The application process of a loan against property is extremely simple. You may use an online EMI calculator to get an idea of the loan amount you are eligible for and the EMIs you need to pay. You may then upload your documents online and apply for the loan. Alternatively, you may visit the lender's branch office, fill the application form manually, and submit it to the representative.
After you submit the loan application form, the lender will send a loan officer to your registered address for original document verification and property appraisal. Once the verification process is successful, you can expect the funds within a day or two.
The Eligibility Criteria
You can easily apply for a loan against the property if your age is on the upper side of 21 and on the lower side of 65, at the time of loan maturity. Additionally, you should be a resident of India. And, your income must be stable enough to take care of the increased financial liability.
The Documents Required
To avail a loan against property, you have to submit documents like identity proof, address proof, income statement, bank account statement, Income Tax Returns, processing fee cheque, and property documents, along with the application form. However, you can also apply for a loan against property without ITR and income proof. But, the lender may ask you to prove your source of income.
A loan against property enables you to use the latent power of your asset to create new assets. With interest rates hovering near their lowest points, now is the best time to apply for a loan against property.