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Today through a loan against property, many people are putting their fixed assets for much better use by keeping it as collateral. This method has helped many to fund their children’s grand wedding or dream college or for expanding their business or for purchasing a holiday home. Have you ever thought that you can also fulfil your other major responsibilities through your property? In a real estate and housing finance industry, it is a common method which is being suggested to people.
So, what is exactly Loan against property?
It is also termed as a secured loan through which you can avail a loan or borrow money by keeping your property or home as collateral or back for your borrowing. Since it is against your own property, the interest rate charged against this is lower compared to the other loans in the market since the loan is against your property, so the lender has no risk over here.
It is an ideal solution to meet all your immediate long-term financial needs. The market value of your property decides the amount of the loan.
Now let’s take a look at the top lenders for the loan against property.
HDFC provides loan against property to meet both your business and personal needs. The loan amount which HDFC offers you is 65% of the market value of your property. The bank processes it faster with simple and hassle-free procedures and hence approves your loan within 3 working days. The interest rate at which HDFC approves your loan against your property is comparatively low and also offers you with customized options.
- You need to be employed to avail this loan, which means you can either be salaried or self-employed.
- They provide interest rates ranging from 9.60% to 10.45% per annum.
- They charge you with a maximum of 1% of your loan amount as your processing fees.
- You repay the borrowed amount after 6 months.
- They charge 2% as pre-payment charges from the outstanding loan amount.
- Late EMI payable charges are 2% of EMI overdue amount per month.
ICICI also provides loan against property for both your commercial and personal needs. The bank offers an affordable rate for your loan, which has competitive pricing. You can mortgage any kind of property be it your residence or your commercial one. It provides a luring and flexible time frame which allows you to pay the borrowed money in an interval of 15 years.
- The borrower needs to be at least 25 years of age for availing this loan.
- The lender has to be at most 65 years of age at the time of maturity of the loan.
- Employment of the borrower is necessary for this loan; it can be either service or business.
- The bank provides various interest rates for different slotted loan amounts. Up to Rs.50 lakhs it is 10.30% to 11.90% per annum, from Rs.50 lakhs to Rs.1 crore it is 10.25% to 11.90% per annum.
- The loan amount offered ranges from Rs.10 lakhs to Rs.5 crores.
- The time frame for repayment of the borrowed amount is up to 15 years.
- The borrower is allowed to use the loan amount for commercial or personal use only.
- The pre-payment charges are 4% and additional applicable charges for floating interest rates and 4% and additional applicable charges for fixed interest rates.
STATE BANK OF INDIA
Other than HDFC and ICICI, SBI provides any purpose for a loan against property. The borrower can fund his/her any type of financial needs by this loan. It can be any need like education, marriage, medical, or business needs. An individual who is either a salaried employee or professional or self-employed having IT assesses is eligible for this loan. In fact, SBI also offers the loan against property for NRIs who own properties in India.
- The borrower should have a regular source of income, and an income taxpayer be it either service or business.
- NRIs should have the loaned properties named on themselves or their wife/children/parents/siblings.
- The borrower should have an income of minimum Rs.25,000 per month.
- This loan should be liquated before the borrower turns 70 years of age.
- The amount for this loan ranges from Rs.10 Lakhs to Rs.7.5 crores.
- The loan amount will be valued on the market price of your property.
- The interest rates are; up to Rs.1 crore is 1.45%, and additional 1-year MCLR, from Rs.1 crore to Rs.2 crore is 2.10% and additional 1-year MCLR and from Rs.2 crore to Rs.7.50 crore is 2.50% and additional 1-year MCLR.
- Processing fees of 1% from the loan amount along with a maximum of Rs.50,000 applicable tax and extra service tax.
Many people are not aware of this concept. But it is the best solution for those borrowers who want a loan at lower rates of interests. All the top banks offer this loan at an affordable rate with customized services and flexible repayment options. So, if you feel that you need a loan to fund your immediate financial requirements, then you can definitely avail this loan but also make sure that you can repay it with a backbone from fixed income.