Need funds? Now take a loan against the property at less than 8% interest rate

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Nowadays, lending institutions offer multiple loan options to their customers. One of the interesting options is the home loan (LAP). A residential or commercial property loan is a secured loan where a borrower pledges their property as collateral. Some people prefer a loan against the property because there are no restrictions in terms of use. Hence, a borrower can use the funds for any requirement like marrying off their children, financing higher education, expanding their business, paying debts, etc.

One of the main requirements of this loan is that your property is legal and has all relevant approvals from government authorities. Property approved or located on illegal land cannot be mortgaged to banks. Second, your income and credit score are very important in determining your loan amount and eligibility. You can apply for a home loan online or visit a nearby bank. You need to complete an application form and provide documents related to your income, assets, personal verification, etc.

Here are some of the key things you need to remember for a home loan.

Secured loans are available at a lower interest rate compared to unsecured loans. Also, if your credit score is good, your chances of getting a low interest loan are very high.

If your property documents are in place, the whole process and loan approval is easy for a loan on property since your property is used as collateral. The process and approvals are simple and take less time.

You can get a flexible loan repayment tenure. The repayment term of the loan can be up to 20 years. The owner continues to enjoy the property without issue as long as he pays his EMIs to the banks on time and the property is kept with the borrower. Ownership does not change when you take out a loan on the property. You can even sell the property if you can’t repay your loan, according to BankBazaar.com.

You can pre-close your loan against the property whenever possible. However, it would be best to discuss with your lender if they charge a pre-closing fee. You may have to pay a nominal fee, but it is good to know this before signing the loan agreement.

It allows you to rent out your property, so if you don’t occupy that property, you can still rent out and earn rental income on the property.

Additionally, if you are a salaried person, you can also claim tax benefits under Section 24 of the Income Tax Act. But the fund should be used for a new dwelling house. A tax deduction of up to Rs 2 lakh is allowed. Tax deduction is allowed on interest payments.

Section 37 allows you to claim benefits if the loan amount is used for business purposes. You can claim tax benefits on your business expenses, such as processing fees, interest, documentation fees, etc. Remember that if the loan amount is used for marriage, education, medical expenses or education, you will not be able to claim tax. advantages.

The table below will help you compare interest rates and EMIs for the loan amount of Rs 15 lakh for a term of 10 years. You can compare interest rates from over 20 banks and decide which suits your needs.

Interest Rate and EMI on Loan Against Property

Compiled by BankBazaar.com

Note: Interest rates on loans against residential property (LAP) for all listed public and private banks (BSE) taken into account for the compilation of data (excluding small financial banks); Banks whose data is not available on their website are not taken into account. Data collected from respective bank’s website as of April 19, 2022. Banks are listed in ascending order based on interest rate, i.e. the bank offering the lowest interest rate on the LAP is placed at the top and the highest at the bottom. The lowest interest rate offered by banks on the LAP is shown in the table (regardless of the amount and term of the loan). The EMI is calculated on the basis of the interest rate mentioned in the table for the Rs 15 Lac loan with a tenor of 10 years (processing fees and the like are assumed to be zero for the calculation of the EMI); The interest mentioned in the table is indicative and may vary depending on the general conditions of the bank. * Rack interest rate

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