Home » home loan scheme » Loan Against Properties- The Pros and Cons

Whether you have a dream of purchasing something you desire a loan is most likely your safest option in case of short funds. There are several kinds of loans which you can select, one of which is a loan against property. In this post, I will discuss about the pros and cons of taking property loan in Delhi.

What is a Loan against Property?
It is a loan where your property is pledged as collateral to take financing from bank. It is a kind of safety measure for banks as it signifies that if you default on repayments, the bank or NBFC has the right to take away your property. Though you may be cautious about your property being collateral, this loan is regarded to be very ideal if you require large amounts. The interest rates of this loan are normally lesser than other loans. Just like how property and personal loan benefits form a part of your borrowing decisions, the benefits of availing a loan against property also are important.

The Pros

  • Big loan means lengthier tenure-The bigger the loan is, the more time you will have to pay it out. As the time period of the repayment is lengthened, the EMI you will be paying on the loan won’t be as high as the other loans. The time period also means that the interest rate evaluated on the principal amount is lesser than other rates.
  • The property type is immaterial – Whether you are the owner of a residential or a commercial property, you are still entitled to get a loan sanctioned. Lenders and banks offer a list mentioning those ones who can get approvals so ensure you do an extensive research before committing yourself to a particular one.
  • They are treated as secured loans -As you are pledging the property as security for loan, it will be treated as a secured loan. The reason for an extra bonus is that secured loans aid you in building up your credit.

The Cons

  • Can’t specify the limit -When you submit an application for a loan against property, you cannot demand for an exact amount. The lender will assess the maximum amount to be lent to you after doing evaluation of your property,.
  • Stringent eligibility criteriaThe criteria to get an approval for this type of loan is quite more intense than the other loans. The central factor that the NBFCs will search for is the applicant’s income.
  • Financiers have the tendency to value property lesser than market rate -As the collateral assessment is done out by the lender, the ultimate figure cited is regularly lesser than the real market price of the property.

When you want to avail a loan against your property, please make certain that you have done comprehensive research before coming to a decision as regards the where and when. I hope you will find it easier to make up your mind as to which type of loan suits you best.

2 thoughts on “Loan Against Properties- The Pros and Cons

  1. Malia Mcleary says:

    I like the helpful info you provide in your articles. I’ll bookmark your blog and check again here regularly. I’m quite certain I’ll learn a lot of new stuff right here! Good luck for the next!

    1. admin says:

      Thanks @Malia Mcheary

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