Loan against property refers to a situation in which the borrower takes a loan from a bank or financial institution where the security for the loan is a property that is owned by the borrower. The nature of the property will determine the amount of the loan that is possible and the extent of the amount of the loan that is actually available at a certain point of time. Availing of a loan against property ensures that the necessary borrowing is completed with the security being created and that the funds are available for the necessary use at a low interest rate. The interest rate is lower than other loan interest rates because the property element makes it a type of secured loan. Loan against property is similar to other loans like home loan, personal loan, etc., but it is available for those who own a property which is not already mortgaged and the person should also be willing to give the property as a security for the loan. The property also has to be in a condition that meets the requirement of the lender because it has to have the necessary value in order to be eligible to be held as a security. The various other conditions of the loan in terms of operation will be as per the standard conditions present for a loan and this usually covers the mode of repayment, calculation of interest as per the agreed rate of interest, term of loan and so on.

Loan against Property can be taken for following purposes:

» Expanding your business
» Getting your son/daughter married
» Sending your son/daughter for higher studies abroad
» Funding your dream vacation
» Funding medical treatments

Kind of properties can be mortgage for a loan
You can normally take a loan against your self-occupied or rented residential property. This could be a house or even a piece of land.

The eligibility criteria to get a loan against property
This criteria will vary from one bank to another. However, from all the host of factors, the common factors that all banks look at are:
Your income, savings, debt obligations
Cost/value of the property mortgaged
Your repayment track record for other loans, credit cards, etc.

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