Think of something you’ve always wanted to do — it could be starting a small business or buying a lavish house. Unfortunately, oftentimes, lack of funds makes turning dreams into reality harder than ever. In such a case, taking a mortgage loan may be a smart way to back your finances.
What is Mortgage Loan: An Overview
A mortgage loan, also known as a property loan or loan against property, is a secure loan sanction against an immovable property or asset. This may include a plot or land, commercial property, or a house. As a borrower, you have the option to keep the asset as collateral and avail of funds from the lender.
The fund you receive can then be utilize for various purposes – purchasing or renovating a house, funding a wedding or your child’s education, financing a new start-up or emergency medical expenses, or even taking a grand holiday. The lender will keep the asset as collateral till the time the entire loan amount is pay off.
Loan Against Property: Features & Benefit
Apart from fact that mortgage loan not come with restriction on usage, several reasons make it popular loan options among borrowers. Here are the top features and benefits of a loan against property.
High Loan Amount
The loan amount is determined on the current market value of the property. You can get a total amount ranging from 70%-75% of the loan-to-value (LTV) of the property that have been kept as a mortgage.
Mortgage loans offer a much longer payback period. The repayment tenor may extend up to 18 years, which allows the borrower ample time to plan the payoffs.
Attractive Rate of Interest
Interest rates offered on mortgage loans are usually low owing to their secured nature. Since such loans are back by a high-value asset, the risk on the lender’s part gets reduce.
Because property loans come with a flexible repayment tenor, the monthly EMI to be pay tends to be low. You can also take advantage of a mortgage loan calculator to determine your monthly EMIs. A mortgage loan calculator is an online tool that makes calculations easy for the borrower and provides accurate results.
Under Section 37(1) and Section 24 of Income Tax Act, 1961, you can avail income tax benefits on mortgage loan interest rates.
Most lenders offer loan approval within 72 hours of applying for the same, give that all eligibility criteria are met.
Mortgage Loans: Eligibility Criteria
Eligibility criteria for mortgage loans may differ from one lender to another. However, listed below are the common qualifying standards that all borrowers must meet.
- Must be citizen of India
- Should be between 33 and 58 years of age (for self-employed individuals, the age limit is 25 to 70 years)
- You can be an employee at an MNC, or in the private or public sector, with minimum 3 years of experience
Before applying for loan against property, make sure you have gone through eligibility criteria for hassle-free experience.
How to Apply for Mortgage Loan
There are two ways of applying for a property loan. You can either visit lender in person at nearest branch, or you can simply visit preferred lender’s website. The steps to applying online are as follows:
- Visit the ‘Mortgage Loan’ page on the online portal
- Check your eligibility
- Then Check out the list of documents needed to apply for the loan
- Enter all details and crosscheck every little information to avoid any errors
- Click on the ‘Apply Now’ to submit your loan application
- The lender will get in touch with you after thorough verification of all the details provided
- Once verified, you can expect to get the loan within 3-4 working days
Online application procedure is faster and more convenient option as it allows you to apply for mortgage loans at any hour. Moreover, unlike in case of branch office, customer care executives are available round-the-clock to resolve your queries, if any.
Make sure you understand about mortgage loan, and how it can help plan your finances. It is good idea to stick to loan amount that you are comfortable paying off at the end of tenor. Also, be sure to compare different mortgage loan interest rates to get the best deal.
The steps to applying online are as follows:
Visit the ‘Mortgage Loan’ page on the online portal Check your eligibility & list of documents needed to apply for the loan Enter all details and crosscheck every little information to avoid any errors Click on the ‘Apply Now’ to submit your loan application The lender will get in touch with you after thorough verification of all the details provided Once verified, you can expect to get the loan within 3-4 working days Online application procedure is faster and more convenient option as it allows you to apply for mortgage loans at any hour.