Know the Relaxations Offered on Loan Against Property

In the case of a financial crunch, there are several ways by which a person can arrange cash. A preferred option is a secured or unsecured loan from a lending institution. 

Among the various loan options available, a loan against property comes with benefits that keep the borrower stress-free and makes taking a loan a convenient option. 

A loan against property or mortgage loan is a loan where the borrower pledges his residential or commercial property as collateral. It is a convenient financing option that can help the property owner make the best use of his home or other properties to arrange for low-interest funds. 

Before taking a mortgage loan, an individual can use the loan against property rates EMI calculator on the website of various lenders to calculate the interest rates and the monthly payments he would have to make towards the loan. 

Relaxations Offered on Loan Against Property

A mortgage loan is a secured loan with several relaxations for the borrower. Here is a list of the relaxations that a mortgage loan offers to the borrowers:

  • Lower interest rate: Since a mortgage loan is a secured loan, the interest rate is much lower than other loans such as personal loans. With leading lenders like Fullerton India, you can get a loan against property for as low as 9% at convenient and flexible repayment terms. 

  • Easy documentation: Lenders ask for much less documentation for mortgage loans than other loans as they are secured loans. The documentation for a mortgage loan commonly includes Identity Proof, Address Proof, Age Proof, ITR returns, Form 16, Bank Statements, property documents, and a photograph. 

  • Quick disbursal: Lenders approve and disburse mortgage loans within a minimal time frame if the applicant’s documents are in order. With lenders like Fullerton India, you can apply online for a loan against property which further eases the application process. 

  • Flexibility: A loan against property offers a lot of flexibility to the borrower. The loan tenure is longer than other loans like personal loans. The customer has the freedom to pledge his residential or commercial property against the loan. You can get a personalised mortgage loan from Fullerton India as per your financial needs and payback capacity. 

  • High Loan to Value (LTV): You can make the best financial use of your house or commercial property by taking a mortgage loan. Lenders offer a high loan to value on mortgage loans which may go up to 70% to 80% of the current commercial value of the property. 

  • Freedom to use the funds: There are no restrictions on the end-usage of the loan amount you get from a mortgage loan. You can use the money for business expenses, the wedding or education of your child, medical requirements, home renovation, vacation, and much more. Since these are low-interest loans, often people take mortgage loans to pay off other debts that may be high-interest debts. It can boost their financial health and reduce their monthly EMI burden. 

  • Tax benefits: Another beneficial feature of a loan against property is the tax benefits you can get on its interest payments. However, these tax benefits are applicable only if you use the loan amount for specific purposes. These include tax benefits on interest payment and loan processing fees when the loan amount is used for business purposes. You can present these expenses as business expenses and get a tax exemption on them. You can also get a tax exemption if you use the loan amount to buy residential property. 

  • Use of the mortgaged property: Borrowers worry that they will no longer be able to use a mortgaged property. However, it is not true. Property owners can continue using their mortgaged residential or commercial property as before even when they mortgage it for a loan against property. The lender holds the property papers till the entire loan amount and interest are paid, after which the papers are handed over to the property owner. 

  • Partial fund disbursement: You can get the benefit of partial disbursement on a loan against property and get only a part of the sanctioned loan amount disbursed. You can get the remaining loan amount later as per your financial needs and pay the EMI only on the disbursed loan amount.

A loan against property is a safe and sensible borrowing option for people who have a residential or commercial property. With lenders like Fullerton India, customers can apply online for a mortgage loan and also calculate their EMIs using the loan against property rates EMI calculator on the website.