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Jul 24, 2018 18

Should You Opt for a Loan Against Flat?

Has an unforeseen circumstance hit you with an emergency cash requirement? Not sure if opting for a loan against flat is a good idea? Let's take a closer look and scrutinize if this is a feasible option!

A loan against residential plot is one of the favored means of fetching high financing from banks and NBFCs with long-term repayment options.

Loan against property contains three broad options:

  • Residential property
  • Commercial property
  • Plot/Land

The property from any of the above should be free from any encumbrance. Loan against flat comes under category one, i.e. residential property. This loan brings along a lot of benefits over and above other options available.

Benefits of Loan Against Property:

  • High Loan Amount

The sanctioned amount of loan is considerably high due to a market valuation of the immovable property. Higher the market value, the better is Loan to Value (LTV). A Loan Against Property amount is higher in value as compared to another collateral-free loan facility.

  • Intended Use

The loan amount can be used to clear a cluster of small debts in one go, helping the borrower to deal with only one credit. Since the amount disbursed is quite high, it can finance marriage expenses, fees for education abroad and the likes.

The borrower may not disclose the same to the lender since the end use is not restricted to any specific use like in case of a home loan or vehicle loan.

  • Affordable Repayment

Loan against property for flat comes with a repayment schedule evenly spread for entire tenor making EMI payments affordable. This EMI value is all inclusive of principal amount and interest rate.

  • Lucrative Interest Rate

Borrowers can choose from the option of a fixed or floating rate while availing the loan. A Loan Against Property Interest Rates has a lower rate in comparison to other loan facilities. Fixed interest rate implies the same rate of interest throughout the tenor of the loan while the flexible interest rate would make each installment different as the rate of interest fluctuates.

  • Flexible Tenor

Long-term loan against residential plot provides a borrower with the benefit with low EMI and helps them save along the loan cycle. The Loan Against Property Eligibility gives the best overview for what documents are needed and how much time a person needs to get oneself fully qualified for the procedure

Eligibility Criteria for a Loan Against Residential Plot :

  1. For Salaried

An individual with age above 33 and below 58 years.

Employed in any private or public sector with a regular flow of income

Resident of India

  2. For Self-Employed

Resident of India

Age range between 25 to 70 years

Cash books to be checked to ensure a steady flow of income

Loan Against Property Documents Required:

For salaried individual -

Salary slips for the last 3 months

Form 16 of the current period /IT returns

Information on all bank statements from updated passbook for the previous 3 months

PAN card /Aadhaar card

KYC documents of the application and co-applicant, if any

Documents of property to be mortgaged

Address proof

If any other loan is currently running, then a copy of the sanctioned facility letter.

For self-employed -

PAN card/Aadhaar card

Address proof

Documents of the property to be mortgaged

Current period /IT returns

Information of all bank statements fro updated passbook for the last 3 months

If any other loan is currently running, then a copy of the sanctioned facility letter.

Note: Copy of the documents to be submitted and original to be produced for verification purpose only.

A flat cannot be misunderstood only as a fixed asset which appreciates over time. Instead, it underlies a financial strength which empowers you to settle your worries by keeping it as security and pay back easily and flexible.

Additional Read: Loan Against Property Important Charges That You Need To Know

Take an idea of your estimated EMI with the EMI calculator and accordingly choose tenor of your loan. Opt for this very promising loan against residential plot from one of the trustworthy lending institutes to fulfill your dream. 

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