Loan against property is more of a necessity these days for full filling various dreams seen by you or your children for a better and prosperous future for your family. Thus, before mortgaging your property one should always keep certain things in mind. The chief among them is to calculate the monetary value of your property that you want to mortgage first. The best thing about them is that they can be given to salaried as well as self -employed people, thus, covering a lot of working class people. You can get a loan of almost 80% on the value that you have registered; this also depends on the different banks and their policies. Moreover, one should understand the difference between home loan and loan against property, the former is used for buying houses and the latter for any purpose required.
Steps for getting Loan against property
The process of opting for a loan against property have certain steps that needs to be followed precisely, they are as follows:
1) Application
2) Processing
3) Documentation
4) Verification/ Valuation
5) Sanctioning of loan
6) Disbursement.
To complete this 4 step process one needs to give banks sought of fees which is mentioned in their terms and conditions.
Documents required
Documentation is a pretty important and critical step and usually takes the most of the time. So it must be done with at most care, there are different parameters for both salaried and self-employed people.For Salaried personal’s you need to get an application form along with your photograph one needs an identity proof and address proof it can be your driving license, voter ID and even Adhaar card will do. Apart, from it one might need latest salary slips as well as form 16. Moreover, bank statements and processing fee cheque is also required.
Self-Employed people will also require an application form with their photograph, there photo ID proof and address proof. They would need to give proof of their business existence and about their educational qualification. They would also need a 3 year ITR, P&L and balance sheet for fulfilling their purpose of attaining a loan. Moreover, last six months bank statements are also needed, one should also bring their processed fee cheques. After complete all the formalities bank might give you a loan in 7 to 10 days. Moreover, the property that you are dealing with should be ensured during the loan period agreement.
Comparing the providers
While taking a go at loans one needs to check the interest rates of various banks. Let’s compare some of the banks and see the various rates prevailing in the market. The four giants that rule this sector are HDFC, ING Vysya, ICICI bank, Axis bank, India bulls and Fullerton. These banks have different amount of rates for varied ranged of deposits. If the amount is up to 30 lacs, the interest rate offered by the above bank is 12.5%-13.75%, 12%-13%, 12%, 13.25% to 13.5%, 12.5% and 12% respectively and the same goes for amount between 30lacs to 75 lacs and even above 75lacs. Now, comes the processing fees which may or may not be different for various banks. Some banks like HDFC, ICICI Bank, Axis Bank and India bulls have same processing fees of 1%+service tax while ING Vysya takes 1%. Fullerton on the other hand takes 1% of the loan amount. Apart from this, you should read the documents carefully before signing, for slight mistakes can lead you into troubles.
The benefits that these schemes gives you are many as you get instant cash, which you can use for expanding your business, it can even help you to get your child married, it might help you to send your child for studies and one can even renovate their home with its help. Nowadays they are just a click away. One just needs to ask for help and they will be at your doorsteps to guide you through all the necessary steps that are involved in the process.
Normally, their agents will come at your place to calculate the total monetary cost of the property, but nowadays you can even get to know it before hand by using the calculators available on the online forum. Apart from it, while dealing with any mediator, one should be pretty careful and should only go for licensed one. It’s always better to approach the bank first and to compare with 2-3 banks. This way you can check all the alternatives that are present before you and can crack a deal in your benefit. As far as clearing the loan is concerned, one can either clear it by the methods suggested by their bank that is by instalments or can even deposit a lump amount to reduce your burden and make things lighter for you in near future!
