Different Use of Loan Against Property

Loan against property is a mortgage loan availed by mortgaging property (residential or commercial). It is a long-tenure loan and can be availed for a period ranging up to 15 years. Being a secured loan, this loan is available at a lower interest rate in comparison to other secured loans. The interest rate on loan against property starts at 8.80%. With the growth in the banking network, there has been an increase in the number of banks and NBFCs offering loan against property in India.

Ideally, we all should plan and save for certain planned financial goals. But many a time, some unplanned expenses may crop up like the sudden medical emergency, wedding expenses or some business related needs etc. In such situations, we need to raise additional funds to meet these emergencies. Under such circumstances, you can think about taking a loan against property. Loan against property can be utilized for the various purpose, let’s discuss them in detail:

Business Purpose

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For the smooth business operations, a continuous supply of funds is required. As business has a fluctuating profit, you may or may not have sufficient funds at disposal as and when required. In such a situation, you have two options either to take a business loan or loan against property. Taking a loan against property for financing business related needs like expansion, purchase of inventory and equipment is a better option as a loan against property has a lower interest rate in comparison to a business loan. Also, you get a longer tenure to repay the loan, hence, affordable EMIs.

Higher Education Abroad

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In present times many people prefer going abroad for higher education due to better job opportunities. Studying abroad requires a lot of funds. You may not have enough savings to finance your education plan. There are various loan options available like you can take a loan against a property by mortgaging your property or you can take an education loan. Before taking a loan, compare interest rates and other loan features. Most likely you will find that loan against property is the most affordable loan.

Medical Emergency

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A medical emergency can hit you any time in life. Though all of us save for unforeseen contingencies, we may not have enough savings. We are left with two options in such situation, first is a personal loan and second is a loan against property. A personal loan is an unsecured loan and is available for a shorter-tenure. You may or may not get the required amount, as loan amount depends upon various factors. On the other hand, by availing loan against property, you will get the much-required amount and being a secured loan chance of its approval are also high.

Down Payment for the New House

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Imagine a situation, you are planning to buy a new house. Buying your dream house is a costly affair and you might have to take a home loan for the same. In case of a home loan, you never get 100% funding, banks give an LTV of up to 90% only and the remaining has to be paid by you as down payment. If you are buying a home of high value then your down payment will run in lakhs as well. In such a situation, you can borrow a loan against the property to raise funds for down payment.

Keeping in mind the various uses of loan against property, you can apply for it through an online aggregator. The main advantage of applying through them is that you get complete assistance from their loan’s representative through the entire loan process.

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