HOW TO ACQUIRE A LOAN AGAINST PROPERTY

Loans are essential aspect of the credit system. They stimulate growth, employment and wealth at both the micro and macro level. A good credit system is essential for the survival of the banking system of a country. This being the scenario, financial institutions are quite precarious when handing out loans. But that cannot be a reason for you to turn away from this system as this hassle is well worth the benefits, such as easy, burden free purchases, tax deductions etc. The best way of acquiring loans is by using property as a collateral. This article will tell you how.

Benefits of acquiring a loan against property

Loans are considered a burden as they involve the aspect of being badgered by the lender. This is true when you take loans from informal sources such as money lenders. It is a threat to the mental and physical safety of both you and your near and dear ones. It can all be avoided by simply going to a formal lender like a bank. It is true that you will have to get a "Loan against property" but you will never face a threat to your safety. A loss of property in the event of a default is acceptable.

Why is this method better than other ways of acquiring a formal loan?

Banks allow you to acquire a loan without keeping a collateral as well. For instance, if you have a large deposit in the bank from which you are seeking a loan, or if you have someone standing as a guarantee. The first method is highly privileged and is not the rule, and the second option is as good as taking a loan from a money lender. If neither is the case loans are given based on credit scores, which drop for the smallest defaults and are hence hard to maintain. So if you pledge property, all this can be overlooked.

Documents required and eligibility

"Loan against property Eligibility" often varies for self-employed and salaried individuals. The same can be said for loan against property documents required also. A salaried individual would have to produce their latest salary slip, bank statements, Identity and address proof, documents of property to be mortgaged and IT returns. For self-employed individuals, you will have to submit your identity and address proof by way of PAN or Aadhaar Card, the documents of the property to be mortgaged and your bank statements for a period of 6 months. As such, if the documents provided are in order, loan will be approved.

Conclusion

Loans taken against property are one of the most secure and reliable ways of acquiring a loan. The risks are minimal as you will be more than inclined to pay up your loans promptly as your property is in stake. Even banks will feel more comfortable in giving you loans as they have a collateral. All in all, everyone feels safe and comfortable. Even the process of acquiring the loan is simplified and you will not have to worry about your request being denied. In conclusion, it can be said that this is the best way of acquiring a loan.