What is loan against property? A brief overview

By: Homeloan0 comments

Loans are funds lent either by individuals or banks/financial institutions to meet family needs. Often these loans are provided against some sort of pledge or security to ensure the safe return of the loan amount. There are multiple types of loans, like home loans, vehicle loans, gold loans, etc., to meet various needs of the people offered by different banks/institutions. A Loan against property is provided by a financial institution on the mortgage of property. It is a secured loan against property, property being the security. Homeloans4u helps people secure home loans and other loans hassle-free.


To get/apply for a loan against a property, the borrower has to own a piece of land, a house, or any other commercial establishment to mortgage it in the bank/institution. The pledged property remains collateral with the bank until the entire loan against the property gets cleared. The bank then assesses the value of the property and provides the loan at a fixed interest rate for a certain period. Most loans against property have a maximum loan period of 15 years. The rate of interest on mortgage loans ranges from 8.15% to 11.80% p.a., depending on the bank/lending institutions. The loan amount disbursed is more than 60% of the market value of the property. 


The loan against property offers greater flexibility to the borrowers in terms of low-interest rates, higher loan amounts, and easy EMIs for longer terms. Homeloans4u helps you to secure a home loan, loan against property, plot loan, etc. quickly with the minimum processing fee and low-interest rates.


A loan against property involves a long-term commitment to repay the amount in equated monthly installments (EMI) every month on time. If the borrower defaults on EMI payments continuously, the bank may possess the property, sell it, and recover the outstanding loan amount. The title deed of the property remains with the mortgagor until the borrower repays the loan amount.


The borrower has to submit all the necessary documents, which include the property’s title deed, income proof documents, identity proof, and other required documents by the lending banks. Post scrutiny and verification process, it takes 15 to 30 days for the funds to release by the lender.


Loan against property is tax-free, whether it’s for business or personal reasons under section 37 (1). However, the borrower cannot claim any tax exemption under section 80C of IT. The sale of the mortgaged property is not allowed until the loan is repaid by the borrower.


A loan against property is a practical solution to get a loan for various personal expenses. Homeloans4u is the one-stop solution to secure a house loan easily, with the best options suiting your needs. 

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