Loan against property offers you a hefty sum of up to Rs. 3.5 Crore against a prolonged tenor of up to 20 years. Besides, it has no end-user restrictions owing to which you can cater to several financial requirements such as medical needs, education costs, etc.
However, there are several myths that you need to clear before you apply for a loan against property, such as:
- Ownership Of The Property Gets Transferred To Your Lender As And When You Apply
While you avail a loan against property, the ownership of your mortgage lies with you unless you default on payments. As and when you fail to repay the outstanding due the ownership gets transferred to your lender.
- You Can Avail As Much As You Want
The loan amount will depend on the value of your property and other factors such as your eligibility, financial stability, age, etc.
- You Cannot Use The Mortgaged Property Till You Repay The Loan
You can reside in your mortgaged property throughout the tenor considering you pay your EMIs on time.
- You Can Avail Advances Only Against Residential Property
Loan against property can be availed against both residential and commercial property, which makes it convenient for everyone.
- The Documentation Process Is Hefty
You are required to submit minimal documents while availing such advances such as Aadhaar Card, PAN Card, Voter ID, driving license, etc.
- You Have To Pay A Higher Interest Rate
The interest rate for your loan against property depends on several factors such as the current MCLR, your income stability, loan tenor, loan amount, etc.
Besides, there are other myths related to such advances, such as the eligibility criteria are stringent. On the contrary, you are required to cater to relaxed eligibility criteria as these credits represent much less risk for lenders because of the mortgaged property.