When to consider a Loan Against Property and its benefits

What is Loan against Property

Banks and financial institutions also grant loans against your property. This can be commercial or residential property, which you will mortgage with the bank. This is a secured loan and the amount of loan you will get will depend on the market value of the property. Interest rate on loan against property usually happen to be of two varieties – fixed and adjustable. The interest rate on loan against property will depend on the total years for which the loan has been taken.

Taking a loan against property is a viable option for various needs, as follows.

• To meet financial requirements of multiple activities: Meeting expenses of important occasions like marriage or higher education can help you tide through the demanding times where the expenses cannot be met by a single or even a double income family in a short time. These milestones can be met comfortably with the help of a loan against your property.
• Illness: Having savings to help you tide through a bad patch in terms of health may not be sufficient if you suddenly contract a disease that requires expensive treatment. This can also happen in case you do not have health insurance, or the existing policy is not enough for you and your family. In such cases, a loan against property with its monthly interest can help you in securing good treatment.
• House Building: In case you have a piece of property on which you want to build your home to settle down post retirement or move into so that you do not shell out money for rent every month, then this kind of a loan is ideal. The rent can actually go towards the monthly interest payments, which will be more like an investment rather than an expense like rent.
• Buying more Property: In case you have your own property and want to invest some surplus money for another piece of property, you can always avail a loan on your property to add to the surplus you are holding on to. This will help you in securing your second or third piece of property with your peace of mind intact.
• Personal Reasons: A particularly dry month in business, or a period of recession where you have been left jobless temporarily can also drain out your savings and resources. If you are holding on to the hope of finding a job soon or making a business breakthrough, you can easily avail a loan against property so that you can help in supporting the household and your personal needs in the interim period.

Benefits – The advantages of taking a loan against property are many. For eg :

Hero FinCorp is a diversified financial services provider in India. We are an associate company of Hero MotoCorp Ltd.