What Are The Benefits of Applying for Loan Against Property
At times, getting a cost-effective loan option can make all the difference. You may need money over and above your financial means for various reasons, including a medical emergency, wedding, business expansion, travel, higher education, house construction, home improvement, or any other reason.
A loan against property or mortgage loan is the best-suited loan for such situations. It offers several unparalleled benefits.
Read on to discover the best features of a loan against property.
The Top-8 Reasons You Should Apply for a Loan Against Property
Attractive Interest Rate
Loan against property interest rates is probably the lowest you can get in the market. And, if you choose a reputed lender like PNB Housing, which has a thirty years’ legacy in the housing finance segment, you can get loans from an ultra-low 9.50%. Loan against property interest rates depends on borrowers’ credit score, income, interest type, term, loan amount, etc. It is wise to check the eligibility before applying for a loan.
No Limitation on End Use
Perhaps the most significant benefit of a loan against property is that there is no limitation on the end-use. If you are eligible for the loan, the lender will never ask how you plan to use the money. However, since a loan against property involves collateral, you must repay the loan as per agreed terms. Failure to repay before the due date might decrease your credit score and make you liable for default.
Another benefit of a loan against property is that you can use it as a tax-saving instrument. Two Sections of the Income Tax Act allow you to save taxes by availing of a loan against property. The first is Section 37(1). Under this Section, you can claim a tax rebate on the interest paid when you use the loan amount for business purposes. The next Section is 24(B), which allows you to claim a tax rebate on the interest component of up to INR 2 lakh when you use the loan amount for home financing.
Simple Approval Process
When you require money urgently, time is of the essence. Loan against property is recognised for its fast approval process. Since a loan against property is a secured loan, lenders usually process it much faster than other loans. Hence, whether you are stuck in a hospital or waiting to pay tuition fees at an institute, you can quickly download the lender’s app or visit their website to apply for a loan.
High Loan Amount
Unlike most other loans, a loan against property does not have any upper limit to how much amount you can avail. Lenders usually approve an amount of up to 60% of the property’s market value. Hence, the loan amount depends on the value of your property. However, as an intelligent investor, you must evaluate your repayment capability before choosing the loan amount. An exorbitant loan amount might make the repayments more stressful.
Besides the benefits mentioned above, a loan against property is also a preferred loan option for borrowers for reasons such as an extended tenure, easy eligibility, minimal documentation, low or nil foreclosure charges, quick loan disbursement, flexible repayment options, and a host of other value-added benefits. Lenders like PNB Housing Finance offer doorstep service for reducing the stress of visiting the lender’s branch for submitting the loan application.