During certain situations, you require funds urgently like a medical emergency, dealing with losses in a business venture, children’s education, a wedding in the family, etc. Borrowing from family or friends may become difficult if the amount that you require is huge. It is not a good option to drain away your savings too. If you have an asset like a fully constructed, residential or commercial property, apply for a mortgage loan. It is a secured loan that you can utilise for any of your personal needs. Read on to know about the benefits that you can get from this type of loan.
When you apply for loan against property, there are a number of benefits that you receive and these include:
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Quick fund disbursal
This is a secured loan and can help you in getting funds on an urgent basis. You need a residential or commercial property that you can keep as collateral with your lender. The amount of loan that you will get depends on the lender’s policies and the market value of your collateral.
It usually has a long repayment term of 15 years with low interest rates.
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Purpose of use of the loan
There is no restriction on usage of the loan and you can use it for the expenses of a wedding, financing your business expansion plans, treatment costs of a medical emergency, purchase a new house, etc.
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Easy processing method
The loan processing requires lesser number of documents compared to other types of loans, so it gets issued within a short period of time. You may get the loan as fast as 7 to 10 working days after you have submitted the required documents.
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No criteria regarding applicant’s profession
Whether you are a salaried, self-employed or a business-owner, you can get a mortgage loan. The requirement is that, you should have a stable income. The current market value of your property is what the lender would consider to determine the loan amount. You may get a maximum of 75% or more of the current market value of the property depending on the lender’s decision.
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Loan transfer
If you get better loan terms, you may transfer the loan from your existing lender to a new lender. You have the flexibility to pay-off the balance amount to your new lender. In this process, your interest rate will also reduce due to reduction in the principal amount. You can apply for an additional loan if you want to.
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Keep owned or rented property as collateral
You can get loan against residential property owned by you or rented residential property. A commercial property or plot of land is also eligible as collateral. In case of a jointly owned property, all the co-owners including you have to be co-applicants of the loan. The lender will not provide loan on agricultural lands or lands which have not been approved by the government.
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Loan disbursement in instalments
After the lender approves the loan, he will disburse the amount but you have the option to avail it in parts. Go for multiple disbursements or one-time disbursement. It will depend on the amount of the loan that you have applied for.
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Flexibility
This category of loans is highly flexible in terms of repayment. If you are a salaried individual, you have to repay it before your retirement but the lender may provide an extension if you have a guaranteed post- retirement income. If you are self-employed, there is a maximum age limit, approximately 60 or 70 years, depending on your earnings. You need to close the loan before you cross that age.
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Online calculators
You will find online loan against property calculator for EMIs (Equated monthly instalments) and eligibility. You have to put in certain details and get information regarding the amount of loan you are eligible for, the monthly EMIs, the period of repayment, etc. This would help to plan your budget in advance.
A mortgage loan is quick and easy way to obtain if you have a residential or commercial property or even a rented property. There are several benefits that you can get compared to other types loans but note the terms and conditions of the loan before you apply. You can also switch over the loan from your existing lender to a new one for better alternatives.