Selecting the Best Loan Against Property
Many of us have a habit of applying for a personal loan the minute there is a financial crunch. However, we do not consider the assets we own as a means of raising money. No, you do not need to sell your assets for the purpose of the money. Rather, you can use the idle property and raise a loan on the same. You can avail of the best loan against property by applying for a secured loan and using the property as a security. In a secured loan, you need to hypothecate your property with the lender and you can enjoy the amount offered as a loan against the same.
Secured loans have low interest rate and flexible repayment tenure. The loan amount will be determined based on the value of the property. If the property has high value, the loan amount will be higher. Once you apply for the loan, the bank or financial institution will appoint a valuer to determine the market value of your property. Based on the market value, the loan amount will be sanctioned. You need to keep in mind that only 60% of the value of the property will be the loan amount. Hence, if you are in need of more cash, you will have to hypothecate a property that has higher value.
You can use any property for the purpose of the loan. You can also use a property you reside in for the same. However, the property should be under your name and should not have been hypothecated anywhere else. A property given on rent or lease can be used for the purpose of loan. If there are co owners of the property, they will become co applicants on the loan. This form of loan has been preferred by many business owners for years. It allows them to enjoy a quick approval and higher loan amount against their property. The loan can be applied for personal or professional purpose.
It is the best loan against property and can be repaid over equal installments over a period of time. You need to keep in mind that it is important to repay the installments on time. If there is a default in the repayment of the same, you could end up losing out on the property. In case of continuous default, the lender could auction the property and sell it at a later stage. Your credit score will be hampered and it could become difficult for you to get another loan. Applicants with a positive credit history enjoy a quick loan approval. Scout the market and look for lenders that offer a low interest no the loan. It will save you thousands of dollars in the long term. The tenure of the loan should be carefully chosen so as to ensure that there is no default in the payment of EMIs. Always keep your monthly inflow and outflow in mind when agreeing on the tenure and the EMI amount.
