The candidates for the loan must fulfill the prescribed eligibility criteria to avail the facility of taking a loan against property. The borrower needs to fulfill the following criteria-
- Age– The age of the borrower must be between 25 and 75.
- Nationality– The borrower must be a citizen of India
- Employment status– The salaried individuals are not eligible for this loan; hence the borrower must be self-employed with a proven regular income stream.
- Status of business- The person seeking the loan against collateral must be in the same existing business for at least 3 years.
- Tenure of the loan- This loan can be availed for a maximum of 15 years. In case the borrower has attained the age of 60, the payment term cannot be extended.
- Maximum loan amount- The highest sum that can be granted as a loan shall be below 75% of the market value of the property. This 75% represents the Loan to Value (LTV) of the property, which can be influenced by factors such as the profile of the applicant, type of property, etc.
- Monthly income- The lenders do not necessarily require a minimum monthly income.
Loan against property eligibility calculator
The loan against property eligibility calculator can be used to figure out your monthly EMIs. By using this tool, you will be able to know your monthly installments well in advance. All you have to do is to enter the variables such as-
- What is your loan amount?
- What is the repayment tenure?
You only need to put these in the calculator and the results will be displayed. Many lenders provide this calculator on their website so that their clients can work out the amount of premiums by themselves. The borrowers can use this loan against property eligibility calculator to compare. The premiums or the periodical EMIs that will be due for different lenders.
Based on the outcomes you are able to select a particular lender. Which will for sure provide you with the lowest EMI payment obligations. However, you should note that increasing the repayment period might make the installment amounts appear low. But the interest expenses will be more as you increase the loan duration.
Why you should choose the loan against collateral?
By keeping your property as collateral, you can easily obtain a loan with a low interest rate. Other benefits this can provide to you will be-
- Loans for long tenure– You can get a loan for as long as 15 years with a loan against collateral. It would assist your business to report higher profits and have enough working capital since the EMIs you are paying are low. You can easily maintain high annual cash flows that will attract the stakeholders to your business.
- Ease in procurement– These loans are easy to obtain. You only have to meet the eligibility criteria and you are all set to get a loan for a value that can go as much as 75% of the current market value of the fixed assets that are on collateral. The hindrances are more in obtaining a personal loan, for the reason being it is highly unsecured.
- Better utilization of money- the value of your property can certainly appreciate with time but you can earn even more with you use the money to grow your business. By applying for a loan against collateral, you will be able to infuse new capital into the business. Which can multiply and provide you with higher profits at the end of the year. The interest you will pay on this loan can easily be set off against the additional profits you have made.
- Higher loan amount- In comparison to any other loan type, a loan against collateral will always provide you with a higher amount. Since you are giving a commercial property as collateral, the lenders rest assured of its liquidation. In case you fail to repay the loan, the lender can easily recover. The dues by auctioning your property on collateral.
Overall, it can be said that a loan against collateral is easy to obtain. And the repayment period can extend up to 15 years. The loans are cheap as the collateral is in form of residential and commercial properties. Which can be liquidated by the lender in case the loan amount is not paid. The borrowers can use the loan against property eligibility calculator. To know their EMI payments by inputting a few variables in the calculator.