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March 2020
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For most individuals owning a piece of commercial or residential property, the best way to obtain finance is by using a loan against property. This is subject to the fact that the individual is able to meet all the mortgage loan eligibility criteria. The collateral that is pledged by the borrower instills a sense of security among lenders and gives the applicant access to a high value loan at a much lower rate of interest.
Apart from this, the tenor of repayment is also longer which ensures that repayment of the loan does not become a burden on the borrower. The loan amount so obtained can be used for a wide variety of purposes which include starting a business, funding emergency medical expenses, or funding educational expenses. However, in order to make this process easier, there are certain golden rules that should be followed by the self-employed individual which are as follows - Pledging Property from a Reputed Builder A registered property under a trusted name dramatically increases the resale value of the property. Other factors such as connectivity, construction quality, amenities provided, location, necessary certifications all contribute towards increasing the value of the property. Thus, if you have to choose between your ancestral house and a property which is located in an IT district and has been constructed by a reputed builder, you should ideally choose the latter. This greatly betters your chances of getting a higher amount when applying for a loan against property. ​Additional Read: How Self Employed can get Higher Amount Loans easily Maintaining a High Credit Score A good credit score proves that you are very responsible when it comes to handling credit and as result qualifies you for a higher value loan. It is considered best to have your score hovering around 750 as it demonstrates that you are financially responsible. However, if your score is low, you should work towards clearing out your existing debts and lowering your credit utilization ratio to better your credit score. There are a number of lenders who offer loan against property today. If the above mentioned rules are followed then you can obtain loans of up to Rs. 3.5 crores which can be repaid back in 20 years.
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