The textile mill chimneys decorating the skyline of Mumbai are yielding new high-rise apartments. Mortgage loans are on a high, considering how they are the cheapest. When you require immediate funds for any purpose at all, you rush to a bank for a secured loan for which you serve your property as a collateral. By encouraging loans against property, we hope to resuscitate our slowing economy and assist our banks through a slump in corporate lending.
The tiny Indian mortgage market does not quite help though! A mortgage loan would not only be meeting up your financial requirements but also contributing to the betterment of our country’s current economic condition.
Reforms are essential, but banks must escape these barriers to increase consumer lending from a mere 3% of the GDP. After all, the Indian consumers are getting numerous alternatives, nearly all banks offer floating rate loans, charge low fees and amortise a mortgage’s principal every month rather than once a year. In case of a non-repayment of the loan the bank auctions the property and recovers the loan.
DOCUMENTS REQUIRED TO APPLY FOR LOAN AGAINST PROPERTY:
In case of a LAP, the lender has a security to rely upon. Thus, there is minimal documentation concerning the loan. Make sure you possess all the right documents as stated by the loan scheme. If the loan is against a joint-property, you must produce documents of both the parties.
- Self attested application with a photograph attached.
- Proof of Identity: Pan Card/ Passport/ Voter ID/ Driving Licence/ Aadhar Card.
- Residential Proof: Aadhar Card/ Ration Card/ Voter ID/ Driving Licence/ Passport/ Electricity or Water Bills.
- Property’s Documentation: Legal property documents that have been authorised by the Government of India. For example :- Registration Certificate, Original Sales Deed, Property Tax Receipts, NOC from the Society and an Allotment- Possession Letter.
- Income Proof: Latest Income Tax Return Certificate, Salary Slips, Form 16, Audited Financial Sheet, Qualification Certificate, Certificate of Practice, Shop Act Licence, Sales Tax Certificate, etc.
PROCESS OF APPLICATION:
A property can act as a rescue from painstakingly high interest rates of an unsecured business loan. By applying for a loan against property you can retain any asset while meeting your miscellaneous other immediate financial requirements. As a property owner you can pledge your residential or commercial property to meet your personal or business monetary needs. You can borrow on the grounds of the market value of your property, usually banks sanction up to 65% of the market value of the property mortgaged.
- The borrower must visit the website of the bank or the financial lender to apply for the loan online.
- You might have to pay a nominal application fee which includes the cost of legal verification process and evaluation of your property.
- The consumer support team of the bank or the lender will contact the applicant and request for the submission of relevant documents.
- The bank or the lender will verify the documents submitted followed by an inspection of the property of the applicant.
- Using your application reference number, you can check the status of your loan application on the website of the lender.
- If the application is approved, then the loan amount will be credited in the bank account of the borrower.
- As per the directive by the Reserve Bank of India (RBI), banks in India are supposedly offering a moratorium on EMIs. The bank will not charge any late payment charges during the moratorium period. However, it must be noted that the interest on your loan will continue to get accrued and you will end up paying more towards interest, thereby further increasing the total cost of your loan. Hence, it is recommended that you opt for a loan moratorium only if you are facing a severe financial crunch.
Since there is no restriction as such, you can use a loan against property for any outstanding bill with barely any documentation while also contributing towards growing our country economically. We must simply see it as a win-win situation and dive into it for an amazing financial experience and a smooth lifestyle.