In case you’ve got a property to mortgage to get a loan from a bank, you should go ahead and apply for the same. You don’t have to be physically present at the bank for loan application. You can make use of online home loan provisions.
A loan against property is an excellent idea if there is not much time and you need money urgently for a financial emergency. There are some advantages and some demerits too when you go for a loan against property.
Advantages:
- Low-interest rate: The interest starts at 8% but it can go up based on the value of the property, the amount of loan applied for and the capacity to repay the loan.
- Documentation requirement is minimal: The number of documents required is minimal for a loan against property. You need to furnish an ID proof and an address proof.
- There is no need for income proof: This is a secured loan because the property is mortgaged and that’s why there is no requirement of income proof. It’s a big benefit for those who don’t have a regular income or who are unemployed and who need money for an emergency.
- No credit score verification: As it’s a secured loan, there is no credit score requirement or verification by the bank and it saves a lot of time and spares you the trouble of waiting. If you don’t have a healthy credit score, a loan against property is the best idea for you.
- Home loan online: You can get to apply for an online home loan and you can get an easy loan against property.
- Use of unused property: You can get an easy loan against property which may be lying unused for any other purpose.
- Property is retained: You can get an instant loan against property without having to sell the property.
Disadvantages:
- Your property can be sold: If you default on your loan, the lender can sell your property to settle your loan amount. It’s a huge loss for you.
- Getting less value: You will be getting only 70 to 80% the value of your property as loan.
- Price volatility: With the volatile economy, the value of the property may fluctuate. You may get a loan of a lesser amount if the value of your property goes down during a particular phase of the economy of the world.
Factors affecting the interest rate of the loan:
- Loan amount: If you mortgage a bigger property, you will be getting a higher loan but your interest rate will be lower.
- Price of property: With the high value of the property of yours, the lower will be the interest rate on loan.
- Loan tenure: You will be paying a larger amount of interest if the tenure of the loan is longer. So, you should ideally choose a shorter tenure.
- Your income: The higher and more secure your income is, the lower will be your interest rate. It happens because the lender has more reassurance about the repayment of the loan from you. After all, you have a sound paying capacity.
- Your employer: If you are an employee of a prestigious company and its name is listed in the bank, the interest rate charged will be lower and the chances of getting a loan will be higher.
- Credit history: The higher is your credit score, the lower will be the interest rate. You have to show your creditworthiness to the lender through your credit history. A high credit score also enables you to negotiate with the lender for better terms.
- Good rapport with the lender: a good relationship with the lender helps you to get a lower interest rate on the loan.
How to get online loans home even with a low credit score
- Search more for better terms: You may find after a long search, lenders who will approve your loan even with a low credit score.
- Talk with the lender: You can talk with the lender regarding leniency on his part in terms of credit score and he may agree to you.
- Go for a secured loan: A secured loan like a loan against property doesn’t require any credit score.
- Go for a guarantor or a co-applicant: A guarantor for your loan means you will be getting the loan without any check on your credit score.
Eligibility for an online loan home against property:
- Salaried or self-employed
- Must have the property in their name to pledge as collateral
- A minimum net income of Rs.25,000 per month
- Must not be more than 70 years of age
- Should be a minimum of 21 years of age
Documents needed:
- Identity proof
- Aadhar card
- Voter’s ID
- Passport
- Driver’s licence
- Address proof
- Aadhar card
- Telephone Bill
- Ration Card
- Voter’s ID Card
- Electricity Bill
- Last 6 months Bank statements
- Payslip or form 16
