All You Need To Know About Loans Against Property: Should You Opt For It?

Banks and NBFCs provide a variety of loans. Loans against property are one of the most common types. They are also known as mortgage loans. Well, if you are a layman, this article will clear all your doubts about mortgage loans. 

What Are Loans Against Property?

Property loans are secured loans. You can take a loan by offering your property as collateral to the lender. It is not a transfer of ownership. However, if you fail to repay the loan, your lender can seize your property.

What Are The Benefits Of Loans Against Property?

1. You can avail of a higher amount. Since they are secured loans, the lender allows you to borrow a greater amount.

2. The lap loan interest rate is lower than other loans. After all, your lender knows you cannot get away without paying it off.

3. The tenure of a mortgage loan is higher. That means your EMIs will be lower. So, it will not dig a large hole in your pocket every month.

4. You can use the money for any purpose. Do you need funds for your business? Your mortgage loan can help you. Well, you can also put it to personal use.

Documents Required For Loan Against Property

Your lender will require the following documents to check your eligibility.

1. Proof of residence

2. Identity proof

3. Latest bank statement showing your income for the past.

4. Salary slip if you are employed.

5. Certified financial statement for the last three years if you are self-employed.

6. Documents of the property you want to mortgage.

How To Increase The Chances of Approval Of Your Property Loan?

1. Maintain a good credit score. A lot depends on it. You will have a decent score if you have repaid your previous loans on time. It will boost your credibility in the eyes of your lender.

2. Disclose all your income sources.  If you have a part-time job or a side hustle, tell it to your lender. That will increase the chances of your loan getting approved.

3. Make sure that the property you wish to mortgage has valid papers. Moreover, you should be its owner.

When Should You Take Loan Against Property?

You can apply for a loan against property for any personal or business requirement. Building a new house is one of the most common reasons to take a mortgage loan. However, many people use a lap loan to finance their business. You can also use it to fund your higher education.

It is better to avoid a mortgage loan when there is a high risk involved. Do not go for a loan against a property if you are just starting a business. 

Final Word

Now that you know all the basics about a mortgage loan, you can decide for yourself if you need one. PNB Housing offers mortgage loans for all your needs. You can get instant approval with minimum documents. So, what are you waiting for? Visit their website and check your eligibility now.