Advantages of Loan against Property in India

2 August 2018

Your owned property is your biggest asset. It can be helpful in procuring a loan against property. Taking a loan against property is a process to obtain a secured loan against the mortgage of the property. Procuring a loan against property in India has the added benefits of lesser interest rates and longer repayment periods. A vast proportion of retail fundraising in India happens through loan against property. Such loans are commonly availed for business expansion, retail fundraising, investment in a commercial property, personal events or monetary needs in times of emergencies. The value of the property will determine the loan amount, which in turn will determine the EMI.

Loan against property is sanctioned on the basis of the property kept on mortgage and the amount varies around 40-70% of the property’s market value. Here are few of the benefits of procuring a loan against property.

1. Lower interest rate:

Since the loan is issued with the property kept as collateral, the rate of interest is generally lower.

2. Low or no prepayment charges: 

Most financial institutions do not charge any prepayment charges in case of loan against property. Even those who levy such charges, their amounts are negligible.

3. Longer tenure:

These loans are generally available for longer tenure going up to 15 years as compared to other loans.

4. Easily approved:

As these are secured loans, it is more likely to be approved without any hassles. Therefore, you won’t find it very difficult to get a loan against property.

5. Lower EMI:

As these loans are available for a longer tenure, the EMIs are lower.

6. Continued ownership:

Since the borrower continues to own the property, they can sell the property and then settle the loan.

7. Re-financing:

An opportunity to re-finance can be availed to increase the loan amount for a businessman who foresees continual business expansion. They can use the same property to continuously build the business later as well.

Seeking the best asset-backed lending and capital solutions in India? We at  Dravya Financial  offer expert financial services pertaining to asset-backed lending. With expertise in structured finance, we extend financing to a wide range of companies and advise them on capital raising transactions, including loan against property, private and public placements, debt financing and structured products. We help businesses leverage their existing assets to secure affordable finance for the expansion of their business, thereby converting their illiquid assets into liquid working finance.

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