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Loan Against Property.

Information about loan against property

Loan Against Property

Secured Loan Against Property

Loan against property is useful for the self-employed or for people who want to expand their business. Of course, one can use it for personal purposes like renovating the house, marriage or higher studies for the children.

Loan against property is a secured loan with reasonable interest rates. In fact, it is cheaper than a personal loan. The interest rates vary from 10% pa to 16% pa.

Eligibility of loan completely depends on the property value. It can be Rs.1,00,000 or even may be Rs.5,00,00,000. Higher the property value, higher the eligibility amount. Property can be a house, commercial space or plot. It doesn’t matter whether you are using the property or you have rented it to somebody. The only thing is, property should be in the loan applicant’s name and it should have a clear title.

Banks will consider the market value of your property rather than the government registration value. Banks can grant a loan against your property up to 70% of market value.




One more thing is, you credit score report (CIBIL score) plays a big role in granting the loan. Banks will definitely check your credit score , your income statement, and your current profession to decide whether you will be able to repay the amount or not.

Since salaried employees have a lot many options, a loan against property is perfectly suitable for the self-employed to get a higher loan amount with cheaper interest rates.

Maximum tenure period of this type of loan usually ranges from 1 to 15 years. But, most of the banks prefer a maximum of 9 years. The major problem with this type of loan is tax. One cannot claim either the principal amount or the interest they pay, in tax benefit schemes.

For businessmen, yes, there are chances to claim for tax benefits. Banks can give you more details when you apply for the loan.







Responses (8)

  1. Sayyed Rehan
    February 6, 2017 at 7:31 am · Reply

    Ok

  2. T Basheer
    January 14, 2017 at 1:43 pm · Reply

    I have a site(place) worth 5 lakshs can I get 2 lakhs loan from Lic?

    • Pradeep Daram
      January 16, 2017 at 11:16 am · Reply

      No loan facility on plots. You MAY try getting mortgage loan. Again, loan against property depends on the lot of things like, plot title verification, market value,etc.

  3. C.SAMYDURAI
    September 8, 2016 at 11:28 am · Reply

    I HAVING 2 ACRS AGRICULTURE LAND I NEED LOAN MAXIMUM 40 LACS

    • Pradeep Daram
      September 26, 2016 at 5:12 pm · Reply

      Not possible to get that much amount of loan against your agriculture land. At least, as per my knowledge.

  4. Nitu patel
    December 30, 2015 at 3:31 am · Reply

    Hello Mr.pradeep,
    please help me taking lic policy/any govt bond.actually im planning to take home loan in next 5 yrs.and i have heard that lic policies and other govt securities provides additional benefits in loan.im 24 years old and im collecting down payment for my home after 5 years.

    please assist in suggesting a good policy or bond which can provide additional benefit to my loan.

    • Pradeep Daram
      January 6, 2016 at 10:25 am · Reply

      Never mix investment and insurance.
      If you are eligible, any bank will grant you a home loan.
      Only endowment policies in LIC such as, Jeevan Anand , Jeevan Saral policies has option of taking loan against the surrender value of the policy.
      I would advice you not to take insurance policy just to get loan in future days. Better invest wisely in high returns investments such as mutual funds. Feel free to revert back, if you need more details.

  5. shankarlal patel
    October 2, 2014 at 8:45 pm · Reply

    I am shankarlal patel I am intres in lic lone my lic 6years complet sir I have in lone in lic police please sir adviesh sir

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