Loan Against Property in India

Many think this is same as mortgage which is certainly not. Mortgage is nothing but buying a property by taking a loan from a bank where as loan against property is nothing but availing a loan from a bank by putting an existing property as a security for the loan acquired from the bank. Nevertheless no one can get the full value of the property as the loan. Only a variable (from bank to bank) amount of money or percentage of money would be given to the borrower or pledger.

It all depends on the market situations and conditions basing on which the bank or the financial institution decides whether or not to give money to the borrower. This is a common practice in every country and in every bank processes. These loans can be for various reasons and for different purposes. They may be personal loans or business loans or home loans or any of the other available ones. The process for any of the kind would be the same. Its basically keeping an existing property as a security for the loan borrowed from a bank or a financial institution. The eligibility criteria for these kinds of loans are the same as for any other kind of loans.

Mainly the age of the borrower and his particulars about his identity are what are generally solicited for. Specifically in case of business loans they (the money lenders) also seek other credentials as to how many years has the company been in existence and sort of the same questions. In case of business loans the borrower has to produce the credentials showing the genuineness of the business. The credentials that are solicited for to check the identity of the borrower are: Permanent account number, driving license, voter’s identity card and some other details of that sort. The tenure of loan repayment varies from one type of loan to another. The time period may vary from as long as seven years to as minimum as two years. This variation is due to the difference in the scale of the business and the risk associate with the business. For a large scale industry the risk associated with any project is huge and the same risk associated with a small and medium scale industry is miniscule.