When it comes to one of the most convenient finance options, loan against property tops the list. This is because it is able to serve the needs of both the salaried and the self-employed individuals alike. Moreover, unlike other loans, they do not come with any kind of constraints regarding where and how the loan amount can be used.
However, the biggest benefits of obtaining a loan against property for self employed is that you do not have to sell your property to raise the required funds. This means that even if you are living in the property, or have let it out, it can still be used as security for raising funds. Secondly, it is a secured loan. This is highly beneficial for those who have low credit scores.
Despite the many benefits which this finance option affords, there also continue to be many myths regarding the application and the repayment process. Here is thus a guide to dispel all such myths.
Relation Between Interest Rate and Tenure
Both these factors depend on the credibility of the borrower which is determined by the credit score. This is because the credit score is a reflection of how responsible you have been with the repayment of your previous commitments such as loans and credit cards bills. If you have a higher credit score, not only will you get a better offer from the lender but chances are that you may also get to negotiate on the offer made to you.
Loan against property is a secured loan and because of which people get a higher loan to value ratio in comparison to unsecured loans. This is why you can expect loans as high as Rs. 3.5 crore to be disbursed in case of secured loans and with higher repayment periods too.