Loan Against Property – All Things That You Should Know
A loan against property, also known as a mortgage loan, commonly gets employed by property owners to raise funds by keeping their property as collateral. Properties, both commercial and residential, can be used as a mortgage, and you can use the funds to buy a new house, finance wedding expenses, medical expenses, educational fees, or diversify your business operations.
Why should you apply for a loan against property?
A loan against property (LAP) is a loan sanctioned against a residential or commercial property as collateral. A bank or financial institution determines the loan sum and the loan against property interest rates after evaluating the current market worth of your property.
Also, you must note that the banks or financial institutions usually sanction approximately 70% of the property worth as a loan as secured loans. Below are some of the top reasons to apply for a loan against property.
- The chances of obtaining a sanction on a loan against property are higher than any other loan. Banks or financial institutions keep the property as collateral if the borrower defaults on the loan repayment.
- A loan against property can likewise assist you in buying a new property or repairing or remodeling the existing one.
- You can use the loan against property for fulfilling various expenses, such as your child’s higher education or business funding.
How to avail of a loan against property?
Mentioned hereunder is a detailed process to avail of a loan against property.
Step 1: The Application
You can readily apply for a loan against property online. However, if you are not comfortable with the online application, you can visit the nearest bank branch and complete the loan application online.
Step 2: A background review
Before getting approval for your loan against property (LAP), the loan applicant will undergo a comprehensive background inspection to check whether you qualify for a loan against property or not. Also, when you apply for a loan against property, a representative from a bank or financial institution will check your eligibility and credit score to check your repayment capacity.
Step 3: Getting Approval
Once the representatives examine your credit score and eligibility, you will get loan approval. However, if your credit score is low, the banks might reject the loan application or will offer you a property loan of a lesser amount.
Step 4: Document submission
For obtaining a loan against property, you need to submit the following documents for verification.
- Duly filled and signed application form.
- Passport size photographs
- Photo Identity Proof
- Valid Property Deed
- Form 16 and past 3 months’ salary slip if the applicant gets a monthly stipend.
- Last six month’s bank statement
- A credit report with a score of a minimum of 750+
In a nutshell, a loan against property is an excellent credit option that helps you fulfill your financial obligations. If you are looking for a comprehensive loan against property, PNB Housing can be your go-to place. Loans against property are a great alternative to personal loans because you can use it for any purpose. At PNB Housing, you get: