Introduction

The term loan against property indicates more toward mortgage loan against property in which the borrower would pledge their existing self-owned residential property, commercial property, and vacant land as security or collateral to procure a sum equal to the market value. The borrower applies for a loan against property to meet their needs like education, medical emergencies, marriage expenses, business expansion, and other purposes. It is a secured loan for which salaried and self-employed persons are free to avail themselves.

Steps for acquiring a loan against property

Know the details of the money-lending firm

For a new loan applicant, thorough research will help you choose a financial institute. The online research helps you with the financial institution with great customer reviews in the market. The borrowers would approach a lender depending on their word of mouth in the market. Though many lenders claim to offer a mortgage loan against property at attractive interest rates, it will help if you must conduct thorough research before finalizing a lender. It would also help when you check for:

• Other lenders regarding their charges on interest rates
• Processing fees
• Statement charges.
• Foreclosure charges
• EMI bounce charges.
• Penalty for delayed or skipped EMIs and others.

Find out the maximum amount and the longer repayment tenor that you can get

After finishing your prospecting, it would help if you find the maximum amount you can get. The lenders provide a loan against property depending on its market value. The borrower usually gets up to 75% value on the property pledged as security and enjoys a more extended repayment tenor. Hence, you need to ensure that the loan amount would not be less than 75% of the property value and that repayment tenure would be more than 15 years. Some banks or other financial institutions offer Rs. 5 crores or more to salaried or self-employed individuals, depending on the factors like:

• Salary or business income.
• Credit score.
• Income from other sources and others.

Find out the rate of interest you need to pay to the lender

After researching, you will find that some financial companies disburse the required amount you need. However, the interest rate on loans against property may be higher, and while some financial services may not give you the required amount, interest rates would be lower. Hence, it would help if you take more time to find the right finance company to sanction the required amount at low-interest rates. Each money-lending firm finalizes the EMI with interest based on the EMI calculator.

Check your eligibility criteria

Each financial company has different loan eligibility criteria. They approve or reject your loan application based on your eligibility.  However, if your application gets rejected by one lender, the other financial service may sanction your loan at a lower interest rate. Here are the following conditions a borrower should satisfy to avail of a loan.

• The loans should be only for satisfying business or personal needs.
• The minimum age should be between 21 years.
• It is not recommended to exceed 65 years of age.
• The borrower should have an excellent CIBIL score.
• The property that a borrower possesses should be self-owned immovable one
• An individual can also mortgage a rented residential property, land, commercial property, or commercial property.
• The property title document should be free from litigation of any type.

Fill out the application form

You can fill out the loan application form either online or offline. Suppose you feel more comfortable applying for a loan against property offline, visiting the nearest branch office or home branch of the bank or any other lender with the necessary documents is the option. Suppose you wish to apply for a mortgage loan online. In that case, you need to upload standard documents accompanied by your id proof, address proof, income proof, and property papers like sale deed, property tax documents, Katha, and others, depending on the lender.

Ensure that all the necessary documents are in place

The documents are vital for all purposes, especially when applying for a loan against property. Here is the following list of documents you need to present for quick approval for a loan against the property.

• Identity proof like PAN Card, Aadhar Card, etc.
• Address proof such as Aadhar & electricity bill.
• Proof of income
• The last 3-4 years of Income Tax (ITR) filing.
• Property documents like Possession certificate, Registration Document, Sale Deed, etc.
• A check to deduct processing fees.

Wait for document verification

After submitting the documents, the lender verifies them in different ways. The verification includes personal details, income, employment, and property details according to the details you have furnished in an application form. Some financial companies would also send their representatives to your residential or office address to ensure that your details are authentic. The financial institutions would sanction the loans and disburse the funds to your bank account after successful verification.

Conclusion

Online research would give you a list of financial help via mortgage loans against property. However, the procedure, as mentioned earlier, is reliable. Also, it would help if you visited the branch personally. It would be easier to get the loan against property at it is a secured loan. The only criteria are to ensure that property papers are in your name. If it is in the name of your parent or a guardian, it would require a consent letter to get a loan.