When Assets Become your Friend-in-Need!
Category: Loan Against Property
There is something about being an Indian and the love of building / buying houses or simply owning property. We consider property the safest and most intelligent investment. And this is just as fair – while we calculate depreciation on all our other assets, property is constantly appreciating. All your hard-work and savings invested into building that dream house of yours for your family. The thought itself leaves you with a nice warm feeling. But it’s not just the security of shelter that a house gives you – it can help you in so many more ways!
No matter how particular you are about saving, there may be times when your finances start to dwindle and you could do with a little help from somewhere. Yes, your family and friends will always be willing to help you, but what if you want to avoid burdening them or don’t want to ask for their help? You still have that one asset that silently promised to secure your life through good times and bad – yes, your property, your house!
UNDERSTANDING THE BASICS
When finances don’t look very bright and you need some working money to get things rolling, one can always apply for loan against property. A loan against property is essentially keeping your property (be it a residential house or commercial property) as a collateral with the bank or NBFC to take a loan from them.
A loan against property in India is one of the most secure and beneficial loans for both the customer as well as banks – which truly is a rare occurrence. Since this loan is a secured loan keeping the property as collateral, the interest charged to customers is much less as compared to that of personal loan for example. Similarly, these loans are a better deal for banks and NBFCs since the risk involved in defaulting repayment of loan drastically reduces.
WHO IS TO DECIDE WHAT THE PROPERTY IS WORTH?
The value of your property decides that amount of loan you can apply for. While seeking a loan against your property, you can always choose to get your property valued at the current market rate from a 3rd party evaluator. Based on such market valuations, the loan amount you can seek varies between 40-60% of the value of the property.
In short, the value of the property determines the value of the loan amount which in turn determines your EMIs.
IS THIS REALLY THAT SIMPLE?
Yes, a getting a loan against property approved is probably one of the easiest loans. But it is always prudent to take some time to think things through. A loan against property is a safe bet since the property will still be under your name, however, at certain times banks can lure you into borrowing a higher some given the valuation of your property. Learn to say no in such cases and loan only the amount that you immediately need.
Your property is your hard-work and is a bundle of all your dreams and aspirations. It is only fair that you take the support of a true asset in your time of need while making sure that you safeguard and retain the property in future to keep building newer dreams!