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Loans against Property

If you want to undertake urgent expansion of your business or invest in some expensive machinery, or make improvements to your existing business property, amongst various other things, then you can take a loan against your property. Loans against property are not just business centric but could be used for a variety of purposes like renovating your home, amongst various other things. However, most people take loans against property to overcome the various financial challenges that might become the roadblock to business growth.


Various Features

As aforementioned, the loan amount can be taken for various purposes like debt consolidation, various emergencies, funding education, and of course, funding various business expenditures. If you are the owner of a business then you are a highly eligible candidate for this kind of loan. Most banks give due importance to various aspects of a business before actually providing the loan. The offer is not only dependant on the financial statement and the valuation of the property but also on the nature of the business and the person's entrepreneurial judgment.

Many banks offer various freebies with loans against property like the personal accident insurance amongst various other things.


Benefits of Loans against Property

The loan amount usually starts from Rs. 2 Lakhs and can go upto Rs 1.5 crores and more. The minimum and maximum loan amount varies from one bank to another and the valuation of the property against which the loan is to be taken. If you want to take a loan against commercial property then you can take up to 50% of the market value of the property and in the case of a loan against residential property you can be offered 65% of the market value of the property. Some of the banks offer flexibility in the repayment options and offer either a loan based on EMI or a loan based on overdraft. Also, you only need to pay interest on the loan amount that has been utilized by you.

As can be seen, there are various benefits associated with loans and some special features as well. Loans against property are essentially a good option for all those who want to take a loan but do not want to get caught in the process of offering a large amount of collateral. Though you do take the loan against your property, the ownership rights of the property do not go to the bank. If at all you are unable to pay back the loan, then you can sell the property and payback the loan amount.

Moreover, loans against property can be taken at a fixed interest rate or could also be taken on adjustable rate. The options in this regard are the same as other loans. However, the difference lies in the interest rate figure, which is generally lower in the case of loans against property. Also, most banks have a dedicated services desk that deals only with loans against property. Therefore, all your queries, doubts regarding the process are immediately resolved.

Its important that you undertake a thorough research of the interest rates offered by various banks with respect to loans against property before you actually zero in on a bank to take the loan from.

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