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What is Loan Against Property – 5 essential Questions Answered!

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When you need money for bigger things in life like sending your children overseas for education, a lot may go in your mind. You may mull over multiple funding options and whether applying for them would be feasible.

A mortgage loan is when you pledge or mortgage your property to a lender to grab a large amount of loan. As a result, the mortgage loan interest rate is affordable and is easier to manage and repay.

As per your mortgage loan eligibility, you may borrow an amount as high as up to Rs.10 crore to fund your multiple needs. You may use the loan amount to fund many basic and vital needs such as:

  • To fund the expenses of an upcoming wedding
  • To send your children overseas for quality education
  • For business expansion
  • To manage urgent medical emergencies
  • Other personal usages

The tenor for the mortgage loan is also longer, which may help you repay the loan in smaller EMIs and manage monthly expenses easily. However, before you apply for the mortgage loan, you will need to prove your mortgage loan eligibility.

Your mortgage loan eligibility is dependent on many factors such as:

  • Your income
  • Your CIBIL Score
  • The value of your to be pledged property
  • Your repayment capacity and track record for existing debts

If your mortgage loan eligibility is not strong, your loan application may get rejected, or you may get the loan at a higher rate. Hence, to make things work in your favour, you can follow some tips to improve your mortgage loan eligibility. Have a look:

1.Your CIBIL Score

Your CIBIL Score is one of the major things checked by the lender while computing your creditworthiness. If you have maintained your past and existing repayments well, your CIBIL Score will be strong. Having a robust score is a sign that you can repay the loan without defaulting on it. Hence, your mortgage loan application may see quick approval at a lower interest rate. Anything above 750+ out of 900 is what is taken as a great Credit Score.

2. The Value of your Collateral

The amount of loan that you wish to avail should not exceed the worth of your property. Also, you only get up to a certain percentage of your home as the loan value by the lender. You should also avoid asking for more amount than the worth of your property. Hence, it is better to get its valuation done. It will help you know how much you can apply for and get the approval accordingly.     

3. Your Income and Employment

Are you regularly employed and have a consistent source of income? A lender may feel confident to award you the loan approval at an affordable rate of interest. Hence, whenever you need to apply for a loan, you should avoid switching the jobs.

Getting the mortgage loan approval when you have the required mortgage loan eligibility helps you get it to cover many of your expenses. You can assess your situation now and do the needful to get the loan approval easily.

Bajaj Finserv offers affordable pre-approved deals on a mortgage loan, loan against property, home loans, personal loans and more. It will help you ease the overall loan process and speed up the approval and disbursement.

There are many ways to fund your needs, and one of them is via availing a loan. Even in the financial jungle, there are many loans available which may confuse you.

In the same context, availing a personal loan may be a good option. But, even a lot better option would be to apply for the loan against property or a mortgage loan.

If you have doubts regarding the loan against property or mortgage loan, we have created some questions and answered them in this post to help you.

1. What is the Loan Against Property or Mortgage Loan?

A loan against property or mortgage loan is exactly what the name says – a loan that is disbursed against the pledging or mortgaging of the property. You may get a loan as per a certain value of your home that you wish to pledge. It is a secured loan where the collateral is your property. As a result, you get to avail a large amount as the loan and at a lower mortgage loan interest rate.

2. What Purposes can the Mortgage Loan serve?

You may avail the loan against property facility to fund many purposes such as:

  • To expand your business
  • To get your children married
  • To send off your son/daughter overseas for quality education
  • To fund your dream world tour or other vacation
  • To fund urgent medical emergencies
  • 3. What Kind of Properties can you Mortgage?

Generally, you may apply for a loan against your self-owned or rented residential property. It could either be home or even a piece of land or plot.

4. What is the Eligibility to get the Loan Approval?

To be eligible for the loan against property, you need to meet some conditions such as:

  • Your income, debt obligations, savings, and CIBIL Score
  • The final value of your property that you wish to mortgage
  • Your repayment record for earlier and existing debts
  • 5. What about the Interest rates and Loan Tenor?

The mortgage loan interest rate may range between 11-16%, which may differ from lenders to lenders. Also, the average tenor for the loan against property or mortgage loan is 15 years. However, the final loan tenor may be as small as 2 years and as long as up to 18 years as per your loan eligibility, income and repayment history.

The answers to the discussed queries would surely help you apply for the loan against property or mortgage loan confidently. You can shop around for the best deals available and opt for one suiting your needs and repayment schedule.

Bajaj Finserv comes with some fantastic pre-approved deals on loan against property, housing finance, business loans, and a lot more. Such deals will help you simplify the loan processes and make it faster.      

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