Are you wondering how to arrange money for your child’s wedding or education or for setting up your business? In today’s world, you have numerous opportunities open in front of you. You can easily take up a loan against your property!
What is a loan against property?
As the name suggests, it’s a loan which the bank offers by keeping your property as security. Also known as a secured loan, the security, in this case, is the property owned by the loan borrower. The value of the property which you have used as a guarantee determines the amount of loan you can borrow. The loan sanctioned by the bank against the mortgage of your property, usually ranges around 40 to 60% of its market value.
The following types of properties can be kept as a security against the loan:
- Self-occupied and owned residential property
- Self-owned but rented residential property
- Self-owned piece of land
- Self-owned commercial property
- Self-owned but rented commercial property
When can you borrow a loan against property?
Anyone can apply for a loan against property on the following occasions:
- Setting up your business
- Organising your child’s marriage
- Affording your children’s education
- Funding your child’s business
- Funding medical treatments
- For buying a piece of land or property
- To renovate an existing building
- Loan consolidation
What are the eligibility criteria to get a loan against property?
The criteria which must be fulfilled to become eligible for borrowing the loan depend from bank to bank. However, the baking officials take into consideration certain factors like your income details, debt obligations, savings, the value of the property mortgaged, repayment history of other loans taken before, employment track, and other aspects. Getting a loan against property becomes even easier if you can furnish them with all the required documents on time.
Most people prefer taking a loan against the property because the interest rate levied on the amount is lesser than personal loans thus making it easily affordable and pocket friendly. Many banks allow the repayment tenure to be as long as 15 years, making it convenient for people as they have to pay less EMI over a long period. In case of any major investment, you can even liquidate your money. The only risk involved in mortgaging your property is that in case you fail to repay the amount of loan borrowed, your property would be confiscated. You must take advice and recommendations from a reputed property loan broker Singapore in this regard.