Introduction
Loan Property Information
A loan against property refers to the loan that is disbursed against the mortgage of a certain property. This loan is usually a particular percentage of the market value of the property which in most cases is approximately 40 percent to 60 percent of the market value. The loan that is given against property is part of the secured loan category whereby the person that borrows gives a guarantee by using the property he or she has as the security.
History
There are many reasons that may make you take a loan against property. Some of them are as follows:
1. When you are in need of expanding the business that you currently have.
2. In the event that you are getting your son or daughter married.
3. You can take it for educational purposes like sending your son or daughter for further studies abroad.
4. You can take the load when you need to fund your vacations or medical treatments.
These are just but a few reasons. The properties that you can loan against are the self-occupied properties as well as the residential property that you have rented.
Features
There are factors that are considered by banks so that you may qualify to get the loan. Though the factors may differ according to banks, the following are some of the common factors that most banks will look at:
1. The level of your income, the savings that you have as well as the debts obligations that you may be faced with.
2. The cost or the value of the property which has been mortgaged.
3. Your repayment track as depicted by past records from other loans you may have taken, credits cards and so forth.
The interest rate that is charged for the loan that you take against property is in most cases 12 percent ranging to 15.75 percent. The loan tenure may go up to 15 years.
Tips and comments
When applying for loans against property, there are some documents that you need to present to the bank to prove your eligibility to get the loan. The documents may vary from one bank to another but typically the following are documents that most banks require:
1. An application form that should be accompanied with your photograph.
2. An ID that proves your identity and place of residence.
3. The pay slips that you are currently using or the latest ones you had. If you are not employed or you are self-employed you will need to have certificates that show proof of your educational qualifications or the existence of the business.
4. You will also need to have a proof of the recent years tax returns, profit and loss in the event that you are self employed.
5. Bank statements for approximately six months that have passed will be needed and also a processing fee cheque.
A loan against property is one of the best ways you can use to raise money. It may be a disadvantage if it happens that the borrower fails to pay the loan back fully. If such a thing happens the bank may be forced to take possession of the property that has been mortgaged.
