What is loan against property?


In simple words, a loan against property is a loan which can be taken on a property where you are the owner or co-owner.

Yes, this is one special loan where you can pledge your property as collateral with the Bank/NBFC and get an amount.

This amount is called as the loan amount. You will get this amount for a fixed period and at a certain interest rate. Each month you will pay an EMI back to the Bank/NBFC. 

Here are some important terms in a loan againstproperty:
Loan amount __________ rupees
Loan Period ________ years
Interest Rate _____ %
EMI ___________ rupees

Another important term here is LTR which is “loan to ratio”. Here, you will get a certain % of the property value as the loan amount. In usual cases, this is anywhere around 40-65%*.
Eg: Ram had a property whose value is 30 lakhs. The Bank checked his property papers, the condition of the property and some more factors. After this, they decided to give him 60% as the loan amount.

60% of 30 lakhs = 18 lakhs!

This is how you can get a huge loan amount to satisfy all needs in life. This kind of a loan is taken usually when people require a huge amount for medical requirements, education abroad or any emergency.

If you want to apply for the best loan against property, you can do so by logging on to Bank’s websites. There you can compare each other website and find the best interest rates. If you feel this is a longer and time wasting process, then you can login to Ruloans web portal where you can get the best deals on loan against property of major Banks and NBFCs in India.

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