Mortgage Loan:
Mortgage Loan is one of the variants of the Personal loan, Laps are secured loans offered by banks and financial institutions using one or more properties owned by you as collateral. One can avail these mortgage loans against commercial property and residential property collaterals. In a LAP the property is mortgaged and a fixed percentage of the prevailing market value of the property (normally between 60-70% of the value of the property) is given to the borrower as a loan. Though such a property is mortgaged to the lender, you are still allowed to continue using it for residential or commercial purposes.
These loans are a better option as compared to personal loans due to their comparatively lower rate of interest. Additionally, unlike gold loans, where the gold ornaments are deposited with the bank and you do not get them back until the loan is paid in full, you can continue using the collateral property in a LAP while you are repaying the loan.
Loans against property are a highly preferred form of loans in India, and are much more easily available with the surge in banks and NBFCs providing such loans. Along with being cost-effective, these loans are reasonably convenient to avail and repay due to the relatively low Loans against Property interest rate.
You can submit mortgage loan application for following purposes:
- Expanding your business
- For your child’s marriage
- Funding medical treatments
- For your child’s higher studies
- Funding your dream vacation
Features of Loan against Property (Mortgage Loan)
- In case of a loan against property, financial institutions offer higher loan amount for longer tenure and at attractive interest rates as compared to other loan plans.
- Quick and hassle free process of Loan against property with speedy approvals
- Residential and commercial properties are accepted as collateral to get loans against property.
- Mortgage Loans are an excellent debt consolidation tool.
For salaried individuals, and for professionals and businessmen who are self-employed, the loan against property eligibility requirement in banks or for other institutions is pretty similar.
The Usual eligibility criteria to avail Loan against property are:
- You must be an Indian national
- You should be at least 21 years at the time of submission of the loan application
- You must have been employed by the current organization or should be involved in the current business for a specific number of years
- You must earn the minimum required salary as well as have the minimum monthly repaying capacity
- You should have a good credit history with proven track record of timely loan EMI and credit card bill repayment. This factor may help you secure a lower interest rate and reduce loan application processing time too.
The documents required for loan against property are as follow:
For salaried individuals:
- Proof of identity and residence proof such as Aadhaar Card, Voter ID Card
- Salary slips of past 3 months
- Form-16 issued by current employer
- Bank statements of salary account for the previous six months
- A cheque covering the administrative costs/processing fees incurred by the bank in processing the application
For Self-employed Businesspersons:
- Proof of identity and residence proof
- Educational qualification certificates, degrees, diplomas, and other academic credentials
- IT Returns of the three years preceding the one in which loan is applied for
- Bank statements of six months preceding the one in which loan is applied for
For Self-employed Professionals:
- Identity and Address proof documentation
- Certificates that prove your academic qualifications/credentials
- All registration/licensing certificate pertaining to your profession
- Business existence proof/business profile details
- Previous 3 years’ balance sheets as well as Profit & Loss Statement of the company.
- Acknowledged Income Tax statements of the company and self for previous 3 years
- Last 6 months’ bank statement.