Check Eligibility for Loan Against Properties
One of the most preferred forms of borrowing for business owners in the country, loan against properties allows you to make the most of your property. Also known as a secured loan, the loan can be availed against the hypothecation of an asset. If you own a commercial or residential property, you can get access to funds on the same. The best feature of the loan is that it has a high amount and low interest rate.
You can use a property that is in use, leased or rented. It can be a land or building but it should be under your name. If there are co-owners of the property, they will become co-applicants for the loan. Once you identify the amount of funds you need, you can make an application with a reliable lender in the industry. Every lender will have varying eligibility criteria for the loan. You can compare the same online and then make a decision.
The basic eligibility criteria is as follows:
• Self-employed professionals and all business entities can apply for the loan
• The minimum age of the applicant is 25 years
• The business should be profitable and in existence for a minimum period of 3 years
• You need to have documents of the property and it should be free from mortgage
If you meet the eligibility criteria, fill the online application form and submit documents of identity proof, address proof, income proof, business documents, bank statements, ITR and property documents. You need to remember that the total value of your property will not be the loan amount. The lender will hire a market valuer to estimate the market value of the property and based on the same, the loan amount will be determined. Lenders generally offer a loan for about 60% to 70% of the market value of the property. Hence, you need to identify the amount of funds you need and then approach a lender with your property documents.
If you have a good credit score, the loan application will be approved in no time and the amount will be disbursed. You can use the funds for any purpose in the business. There are no restrictions on the end-use and the lender will not ask you about it. It is important to repay the loan in time. You will have to pay the principal amount and interest over the tenure of the loan in EMIs. If you default in the EMI payment, you could end up losing the property to the lender. Since the property is hypothecated with the lender, they have the right to auction it to recover the outstanding amount.
Loan against properties is an ideal loan product for business owners who are willing to make the most of their idle property. You can apply for this type of loan, in case, you have an asset in your name and make use of it to fulfil critical requirements necessary to take your business to greater heights.
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