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Posted on Wednesday May 1st, 2019

Financial setbacks are like unannounced guests at the wrong time and derail your plans. Many of us might not have that savings and need to fall back on options that are not so pleasant – like borrowing from a relative or a friend. In times of crisis, one of our recommended options is Loan against Property From ShubhBank. A loan against property (LAP) becomes a viable option and also known as Mortgage Loan. This loan is categorized as a secured loan and disbursed against the security of the borrower’s legally owned property. They are cheaper than personal loans.In case of LAP, lenders have conditional ownership over the borrower’s property until the loan is repaid in full. Therefore, the borrower can obtain a loan amount commensurate to the value of the property. The loan against property offer larger sums at lower interest rates and longer repayment tenures. The borrower still remains the lawful owner throughout the loan tenure and can choose to repay the loan according to his/her financial standing and situation. And unlike other loans, it provides the opportunity to borrower that how to overcome the financial setbacks through loan against property. This loan can raise big sums and are are also suitable for short-term needs like medical treatment/emergencies, children’s education/marriage, starting/expanding business, etc.

Eligibility criteria
The eligibility criteria may vary from bank to bank. Some common factors that all lenders consider are the borrower’s income and repayment track record (for credit cards, previous loans, etc.) And the market value of the mortgaged property. More than this, the borrower’s employment status, age, financial standing, and credit score also play a key role in determining the loan money that is sanctioned. Lenders prefer that the borrower is paying off the debt while still employed – this is precisely why the maximum age for maturity of LAP for a salaried individual is set at 60 years and for self-employed individuals it is 70 years.

The rate of interest on a LAP ranges from 12-15% per annum depending on the lender. The tenure of a loan against property ranges between 10-15 years. Our institution usually has an online LAP eligibility calculator by which you can calculate the exact EMI amount based on your loan repayment schedule.

Documents required
The key documents required by lenders those offering loan against property are usually the same, however, there may be some minor variations from one lender to another lender. The list includes application form, valid ID, residence proof, latest salary slips/FORM 16, bank statements of last six months and IT returns of last 2 years.

A loan against property is the best way to raise money when the property market is bullish. In case, the borrower is unable to pay off the loan on time in full, we are authorized to take possession of the mortgaged property and auction it off to recover the loan owed. Like any other loan, default in repayment can negatively impact the borrower’s CIBIL score. It is advisable to assess your repaying capabilities and understand all associated conditions before Applying For a Loan against Property.