Things you must know about loan against property in 2021

 A loan against property provides you access to immediate funds by mortgaging your property as collateral. Featured with long repayment tenor and affordable interest rate, a loan against property becomes a viable option for prospective borrowers. 

One of the enticing factors that make this credit facility a high-demanding option is a loan against a property interest rate. Since it is a secured credit, lenders impose flexible interest rates and repayment terms on such credit. 

If you are planning to take a loan against property, here’s presenting some important pointers that you must know:

• LTV ratio

To secure the best deals and offers, it is crucial to compare different lending institutions to analyse loan to value (LTV) ratio provided by them. LTV ratio refers to the percentage of the property’s market value offered by financial lenders as the principal.

• Loan against property eligibility criteria-

This factor can vary from one financial lender to another. However, some of the common factors considered by the financial institutions are age, credit score, income proof, etc. If a borrower qualifies the eligibility parameters, they can use a loan against the property EMI calculator to know the exact amount to be paid towards the loan. 

Moreover, they can use a loan against property interest rate calculator to know the overall interest to be paid for such a credit form.

• Evaluation of property

Since a loan against property is availed by pledging an owned property, lending institutions estimate the property’s value before sanctioning a loan amount. Leading financiers also consider property’s age and overall condition.

• Essential documents

The loan against property documents required to avail the funds may vary from one lender to another. But the basic documents are the same, and these include-

1. KYC documents 

2. Address proof

3. IT returns

4. Latest salary slips

5. Mortgaged property documents

Besides, borrowers can avail loan against property without income proof by submitting few essential documents that will substantiate their credibility as a borrower.

Hence, a loan against property is one of the beneficial options to avail funds during a financial crunch. However, like any other loan variant, default in repayment can negatively impact the credit score.