In India, loans are the most preferred financial instrument that fulfils the myriad aspirations of people. Be it a dream wedding or setting up a business, funding urgent medical expenses or purchasing a motor vehicle, you can always depend on a loan to fulfil your dreams.
Loan against property, or mortgage loan, is one of the easiest loans you may apply for if you need urgent money. For the fact that a loan against property is the most frequently applied loan in India, Indian lenders have made the process of mortgage loan application extremely easy.
This article will give you a ready reckoner of the key features, eligibility criteria, interest rate, and documents required to apply for a loan against property.
What are the Key Features of a Loan Against Property?
Whether you need money for business expansion or foreign travel, higher education, marriage, a family event, house improvement, or any other non-speculative and legitimate activity, a loan against property can be the best financial instrument for you.
With a loan against property, you can get up to 60% of your property’s current market value as a loan. What’s more, the loan amount would factor in the lowest value between the property’s market value and your repayment capacity. Hence, you can always stay assured about getting the best deal on a loan against property, irrespective of the prevailing rate of interest.
Generally, the repayment tenure of a loan against property is 20 years, which is much higher than a personal loan. Additionally, you may get a host of other features like flexible repayment options, doorstep delivery of services, loan enhancement, customised eligibility, and loyalty.
What is the Eligibility Criteria to Apply For a Loan Against Property?
The eligibility criteria of a mortgage loan are extremely easy. To be eligible, you must be a citizen of the Indian union and possess ownership rights of a residential or commercial property.
Additionally, your age should be between 18 and 65 (if you are self-employed) and 18 and 60 (if you are salaried). Generally, lenders would like you to have a monthly income of at least INR 25,000 to consider you suitable for a mortgage loan.
What is the Interest Rate of a Loan Against Property?
The loan against property interest rate can be floating or fixed.
The fixed rate of interest does not defer and remains the same throughout the tenure of the loan. The floating rate, however, changes whenever the Reserve Bank of India changes the key policy rates.
Generally, the interest rates start from 9.80%. However, the final rate you get will depend on factors like the credit score, repayment capacity, type and nature of the property, a few other factors.
What Documents are Required to Avail a Loan Against Property?
As a mortgage loan is a secured type of loan, the documents required to avail it are fairly easy. The following is a list of documents you need to submit to avail a mortgage loan:
- Filled application form
- Age proof
- Address proof
- Identity proof
- Income proof
- Bank statement – 6 months
- Form 16 – 2 years
- Property documents
- Processing fee cheque
Availing a loan against property can be the easiest way to give a boost to your financial profile. Analyse your repayment capacity before applying for a mortgage loan, though.