Buying a house is one of the biggest investments an individual ever makes in a lifetime. However, most often, you would find people completely overlooking the most important aspect of a home – its periodic maintenance. That being said; usually, a house does not give you many reasons to ponder over, but when it does, the cost involved to carry out upgradation or repair may require generous funds.
Whether you need a complete or partial renovation of your house or wish to carry out urgent repairs, a loan against property can be your best bet during such times of need. This article contains everything you should know about a loan against property, the easiest and the safest financial instrument to fund home improvement or repair.
What is a Loan Against Property?
A loan against property is a secured loan that calculates the loan amount by estimating the value of your property. You can avail a loan against property if you are an owner or joint owner of a residential or commercial property. The best feature of a loan against propertyis that you can use it for any purposes, like home painting, plumbing work, electrical wiring, or home repair. You may even use it for constructing a floor or an entire house.
What Documents are Required to Apply For a Loan Against Property?
As a loan against property is a secured loan, the documentation required to avail it is simple. You may also avail the benefits of the e-verification of documents.
Irrespective of which method you choose, the process remains the same.
Firstly, you need to download the application form, fill in the details, and affix a passport size photograph on the application form. Then you need to attach age, identity, address, and income-related documents, Form-16, Income Tax returns, bank statement, educational certificates, property documents, and processing fee cheque. Once the application form and the documents are ready, you should submit them to the lender and wait for a call from the lender, who will guide you through the rest of the process.
Generally, lenders take less time in processing a loan against property as compared to many other loans.
What is the Interest Rate of a Loan Against Property?
The floating rate of interestof a loan against propertystarts from 9.90% and may go up to 11.25%. Lenders calculate the interest rate of a loan against property based on your credit score, monthly income, existing EMIs, fixed monthly expenses, nature and the stability of income, and a few other factors. Credit score plays a major role in determining the interest rate you are eligible to get. For example, if your credit score is above 800, you may expect to get an interest rate in the range of 9.90% and 10.40%. If, however, your credit score is below 650, the interest rate may go up to 10.85%.
What is the Repayment Tenure of a Loan Against Property?
The repayment tenure depends largely on the lender you choose. PNB Housing Finance, for example, provides you with a high repayment tenure of 20 years from the date of disbursement of the loan amount. Moreover, if you are an existing customer, you can get an exclusive loan against property interest rate and flexibility in repayment terms.
While an ailing house can make you lose your sleep, a loan against property can ensure you get your peace of mind back.