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March 2020
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If you are looking for a home loan to move into a bigger or new home while already having an old property; you can ease the burden of the home loan by mortgaging your old property! The biggest between loan against property vs home loan is that unlike a home loan, the former allows you to easily borrow huge funds against your old property at an affordable rate.
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Use the Fund to Put Down the Down Payments and Prepay or Foreclose the Loan
These are the biggest mortgage loan benefits. Other than prepaying the loan and easing your burden of a home loan; you can use the mortgage loan amount to put down a significant chunk of home loan down payment. Use the Mortgage Loan Money to Fund other Purposes The most significant difference between loan against property vs home loan is that in the latter you can only use the loan money for home purposes whereas, in the former, you can use it for various other purposes such as business, wedding, and education. These are some benefits of the mortgage loan. As a loan against property is a secured loan, you can get a lower interest rate, which reduces your stress further. Moreover, you can still have its ownership of your old property and do not have to sell it. Additional Read: Ease your Home Loan Burden with Mortgaging your Old Property
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Loan against property is an easy way to acquire a loan anytime with less paperwork. And the best part is one can track and manage the entire process through online portals of the lenders.
Here are some of the aspects to know while you plan for a loan against property. Know Your Property Value It is always better to learn about the actual value of your property before you plan to use it as collateral. You cannot ask for a loan that surpasses the value of your property. If you are aware of the worth of your property it will help you to better decide on the loan amount.
Interest Rate
The property loan interest rates is always lower than personal or home loan. So you can get a higher amount of loan at a lower rate of interest. This also assists you in easy payment of the EMIs. Repayment Capacity Once you borrow for the loan against the property you also need to consider repayment capacity. On the basis of your overall income scale, you must decide on the loan amount and the tenure. Your loan against property eligibility depends on how much your annual income is. Proper Documents Loan approval depends on your documents that you will show to the bank or to the NBFC. With appropriate documents, your entire loan procedure will become easy and fast. Another flexible way to apply for the property loan is with the help of a co-applicant. Also, keep yourself informed regarding all the additional charges or processing fees involved while you apply for the loan. Additional Reads: 6 Loan Against Property Terms that You Should Consider Easy Tips To Boost Your Eligibility For A Secured Loan |