Are you a property owner looking to raise substantial funds to fulfil your personal or professional commitments? If yes, property loans could be the answer to all your financial needs and problems. 

Property loans or loans against property are loans that property owners can secure by pledging a property they own or have legally in their name as security. Since a property backs these loans, the risk for lenders is low, which allows lenders to extend these loans at highly affordable property loan interest rates. Property loans are also referred to as loans against property or mortgage loans.

Property Loans: Features and Benefits 

1. Property loans or loans against property are low-interest-rate loans. Property loan interest rates start at about 8.50% per annum. These low interest rates can be attributed to the presence of collateral that helps offset the risk for the lender. Low property loan interest rates directly translate into low and affordable EMIs, thereby leading to ease of loan repayment and high return on investments.

2. Since property loans or mortgage loans are backed by collateral, not only are the mortgage loan interest rates low but lenders are also not extremely rigid about applicants meeting each and every mortgage loan eligibility criteria. This makes getting approved for these loans quite easy. 

3. Property loans also come with a long repayment tenor. Borrowers are given the option to choose to repay their loan over a period between 15 to 20 years. This long tenor allows borrowers the flexibility to play with the repayment period to keep loan repayment easy and stress-free. 

4. Once a borrower pledges a property as collateral, they cannot sell the property until they have repaid the original loan amount along with interest. As soon as a lender accepts a property as collateral, they place a lien on it. The lien placed stops the property owner from selling the property. However, it does not stop the borrower from using the property as they like or even renting it out and earning rental income from it.  

5. Loans against property funds come with no usage restrictions. In other words, borrowers can use the loan money to fulfil all kinds of personal and professional obligations. This is one of the biggest benefits associated with property loans, which also makes these loans a very popular tool to raise funds. 

6. Lastly, depending on how you use the funds availed of, you can become eligible for property loan tax benefits under various sections of the Income Tax Act. For instance, if you use the funds to take care of business expenses, you can claim tax benefits under Section 37(b) of the Income Tax Act, and if you use the loan amount to buy another property, you can claim tax benefits under Section 24b of the Income Tax Act. 

Loans Against Property: How to Apply 

If you are considering applying for a loan against property, know that one of the first things you will need to do is look for a trustworthy and reliable lender. There are many, many lenders operating in the market these days. 

Therefore, devoting time to finding the right one for you is extremely important. What is also important is ensuring you have all the loan against property documents required to ensure a smooth application process. 

Once you have decided on the lender you want to go with, here’s what you need to do to apply for a loan against property. 

1. Access the loan application form on your selected lender’s website and fill out the form with all the information provided. Be very careful while filling out the form. Your lender will verify all the information provided by you. So, make sure to never fake information in your loan application or lie about any of the details. 

2. Once your lender receives your application, they will go through it and if they have no reason to doubt your repayment capacity and are interested in extending you a loan, they will ask you to submit certain documents, such as income, address, KYC proof documents and property documents.

3. After you have submitted all the required documents, your lender will hire experts to verify all the documents provided by you and make sure that all the information provided in your loan application is accurate. They will also hire technical experts to check your property and make sure it meets their eligibility criteria. 

4. If you pass all the checks, your lender will call you for a round of negotiations, where you must negotiate with your lender for a low rate of interest and other beneficial loan terms and conditions. 

5. Finally, sign the loan offer and wait for the loan amount to be disbursed into your account.

Property loans are an excellent way to raise money, especially during a financial emergency. However, these loans must always be availed of after elaborate financial planning and when one is ready to make such a commitment.