Loan Against Property: Best Suited for Business Ventures
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What is Loan Against Property?
Loan Against Property is a secured loan product that can be useful for both salaried individuals and businesses. The loan is approved once you have mortgaged your residential or commercial property. The bank approves the credit amount, which is equal to the present value of the asset. As a loan buyer, you can mortgage a property that is self-occupied, rented, or any piece of land owned by you.
Benefits of a Loan Against Property
All types of loans have their own unique features and benefits, and a loan against property is no different. This secured loan is a better alternative to unsecured loan types like personal loans, as they offer similar functionality but with one upgrade – higher loan approval and lower cost of borrowing. Here are other reasons that make Loan Against Property ideal for your business expenses.
End-Use Flexibility
The main reason that Loan Against Property is the ideal option for all business-related expenses is its free-to-use policy. Most secured funds, such as home loans or car loans, have specified uses for funds to facilitate the purchase of a property. However, Loan Against Property, in this aspect, acts like a personal loan – making it more attractive
Competitive Interest Rates
Another advantage that the borrowers get is the much lower interest rates on their loan amount. In comparison, personal loans have much higher interest rates, often going up to 12%, which is significantly more expensive than loans against property. Starting a business or going through an expansion can be a harrowing ordeal but you can still save on their interest expense by taking advantage of low-interest loans on the property – which will help you manage your financial stress as you build your business.
Ease of Repayment
When you embark on a new business journey, things may go haywire for a while before you regain some normalcy in your business. It is extremely important that you enjoy some flexibility in paying your loan amount, as it allows you to meet your EMI obligations and pay at your own pace, without jeopardizing your business or personal finances.
Most lenders offer up to 18 years to enable flexible repayment for borrowers, so you can take your time to repay the amount while focusing on growing your business.
Lower EMIs
The longer the tenure, the lower the EMI. Since the tenure of the Loan Against Property is longer, the EMIs also get reduced. Thus, bringing down the burden of the loan.
Financial Assistance
A loan against property acts as financial aid when you want to fulfill any requirement. At ICICI Bank, you can avail of loans up to a maximum of Rs 5 crore at attractive interest rates with flexible repayment options.
Tips for Availing a Loan Against Property Without Income Proof:
While you must keep your home as security to obtain this loan, most banks will need you to provide proof of income. If you are unemployed, this can be challenging. If you want to get a loan without having to show proof of income, the process is lengthy and may require you to meet additional requirements. As a borrower, you have several options for obtaining a loan against property without providing proof of income. The strategies listed below can assist you in obtaining a loan:
SUBMIT AN APPLICATION WITH A CO-APPLICANT:
There are numerous benefits to having a co-borrower on a loan. It not only allows the borrower to obtain a larger loan amount, but it also provides confidence to the financial businesses about your ability to repay the loan. Because they have income verification, the co-applicant will be deemed the primary borrower.
VERIFY YOUR BANKING EXPERIENCE:
Always have a look at your savings bank account activity before applying for a loan, as lending institutions check bank statements. A borrower must keep a minimum balance or have sufficient funds on hand. Good banking practices improve your chances of getting a loan.
SPEAK TO YOUR RELATIONSHIP MANAGEMENT:
Every savings bank account holder is allocated a relationship manager. He or she can assist you with the loan application process and connect you with the appropriate individual. Having an honest discussion about the lack of income documents and assuring them of prompt payback will aid your case.
EXPLAIN WHY YOU DO NOT HAVE INCOME PROOF:
Explain to the concerned person why you did not file an income tax return in the current or preceding year due to unforeseen circumstances or a valid reason. The loan officer will evaluate your previous income when determining your repayment capacity.
SELECT A LOWER LOAN-TO-VALUE (LTV) RATE:
The Loan to Worth Ratio is the amount of money a bank can lend you based on the market value of your home (LTV). If you choose an LTV of 80 percent, for example, the bank will cover 80 percent of the cost and you will be responsible for the remaining 20%. If you choose a lower loan to value percentage, your chances of getting the loan approved without income evidence improve.
THINK ABOUT CHOOSING PEER-TO-PEER LENDING:
There are various financing options to pick from in the age of digitization and consumerism, such as crowdsourcing and peer-to-peer funding, where a group of individuals raises money for a common aim. Fintech platforms like this provide loans faster and with less reliance on income documents. However, you should be wary of the terms and other hidden fees that such platforms impose.
Documents Required for Applying for A Loan Against Property Without Income Proof And ITR
- Identity proof on the application form
- Proof of address
- Photographs in passport size
- Bank statement over the previous six months
- Check for the processing fee
Obtaining a Loan Against Property without income proof and an ITR form is difficult. The financial business is growing by the day, and loans are available for all types of customers. It is possible to get a better bargain by doing some research online and comparing several lenders who offer property loans. Measure your Loan Against Property eligibility before applying for a loan. You’ll have an easier time negotiating this way.
Loan Against Property is available from Home First Finance Company to assist you with high-end bills. With a straightforward Loan Against Property eligibility criteria and minimal paperwork, the loan application process is simple.
All in All, you can use the above steps and get any loan against property easier.
What is Loan Against Property? Loan Against Property is a secured loan product that can be useful for both salaried individuals and businesses. The loan is approved once you have mortgaged your residential or commercial property. The bank approves the credit amount, which is equal to the present value of the asset. As a loan…
What is Loan Against Property? Loan Against Property is a secured loan product that can be useful for both salaried individuals and businesses. The loan is approved once you have mortgaged your residential or commercial property. The bank approves the credit amount, which is equal to the present value of the asset. As a loan…