The requirement of cash can arise without any prior notice. In such situations, we usually look up to borrowing options from family and friends or consider opting for personal loan to meet your emergency requirements. If the money required is more then what your family, friends or personal loan can get you, you can consider a "Loan Against Property". If you have strategy in your mind to tide over the current crunch, this loan is an great option you can consider. Your dream home is just not give you shelter only, it is an asset and can protect you and your family in the need of money. ShubhBank offers you a loan against property, that is one of the most effective and preferred way to raise large loan quantum by keeping your valuable property as a collateral with our bank. As the real estate prices escalates day by day, so this type of loan is good to raise large amount of money because of increasing value of your home that ultimately results into increased borrowing capacity. Mortgaging your property is an amazing option for fulfilling your short-term requirements like child’s wedding, medical emergency or funding child’s higher studies. The loan is featured with a lower interest rate and longer repayment tenure as compared to personal loan. Before applying for a loan, our bank have proposed some essential things you must know when opting for Loan Against Property :
COMPARE THE LOAN TO VALUE RATIO
It is important that if you are trying for a loan the you will get the best deal for yourself. So it is very important to compare the LTV(loan to value) ratio of various banks and lending institutes that they are offering. Banks usually offer up to 65% of the property value for loan while other financial institutions can offer up to 75%, so as ShubhBank. This difference is due to process in which the property is evaluated by rules of banks that restrict the LTV offered.
DIFFERENCE IN LTV RATIO OF COMMERCIAL PROPERTY AND RESIDENTIAL PROPERTY
The LTV offered by the bank for commercial property is always lower than that of your residential property, if you pledge it as collateral. It assures the bank that borrowers will try to save their residential property more ardently than their commercial property, hence reducing the bank’s risk factor. As your property is pledged as collateral, banks are averse to a scenario in which you are not capable to repay, they have to take possession of your property to recover the dues.
RATE OF INTEREST ON LOAN AGAINST PROPERTY
It is always good to compare the rates of interest offered by the banks and lending institutes before taking the loan. As it is much about every penny saved as it is about every penny earned. Comparing all the options will enable you to get the best deal for yourself. The interest rates offered by ShubhBank is usually between the range of 9%-14% which is lower than the rates of personal loan.
The other key benefits associated with our loan is long tenure and repayment flexibility. There are so many misconceptions about Loan Against Property but keeping in mind these points will help you rule over your financial crisis.