Interesting Facts About Loan Against Property Interest Rates

A loan against property is a loan which is taken from the bank with the borrower’s property provided as security until the loan has been repaid. If the borrower fails to repay the loan, the bank can take ownership of the property. The loan amount provided however to the borrower is only forty to sixty percent of the actual value of the property. This loan is easily obtainable as compared to other types of loans as security is provided. The process of applying and getting one’s loan against property approved is quicker compared to the procedure of a home loan. A loan against property can be utilized for a variety of purposes. A borrower can use a loan against property to expand their business, afford a holiday abroad, medical treatments and fund your child’s studies abroad. The tenure of such a loan can go up to 15 years. The loan against property interest rates tend to vary based on the bank the applicant selects. There are however some facts that make it different from other loans:

* The reason why loan against property interest rates are low is because it is a secured loan. The borrower provides the bank with the ownership papers of their property as security until the loan has been prepaid.

* The loan against property interest rates are some of the lowest of all the retail loans available for applicants in the market.

* The burden on the borrower each month to repay the EMI is much lesser since the interest rate charged is affordable.

* Though the loan against property interest rates is lower, the loan has to be long term since the tenure varies between 5 to 15 years. An applicant cannot opt for this loan for a short term period.

* Even though the loan against property interest rates is affordable, it is extremely important for the borrower to plan in advance on how they plan to repay the EMI each month.

* There is a risk with such a loan as the borrower is using their own property as security. Failure to repay the loan can cause the borrower to lose his property. Defaults in the loan repayment process can lead to the bank selling the property to recover the loan amount.

A loan against property is an ideal loan to help fund any financial requirements of the applicant. With a low interest rate and long term tenure, the repayment process is more affordable. As long as the borrower plans his finances in advance and makes his payments consistently, he can easily repay the loan.