One of the most popular types of secured loans is a mortgage loan. A secured loan is one in which a borrower pledges property to a lender in exchange for funding. Banks and NBFCs like a loan against property provider in Ahmedabad are the most common mortgage loan lenders.
In mortgage loans, the borrower only pledges the property to the lender until the loan is repaid. Besides, mortgage loans have lower interest rates than unsecured loans. Because they provide security for the lender, and they also feature flexible repayment terms to make payments easier to budget for.
However, only a few types of property can be pledged in order to obtain a mortgage loan. To learn more about the different mortgage loans and the sorts of properties that qualify for mortgage loans, keep reading.
Types of Properties for Loans Against Properties
1. Residential property
Your residential property is simply the place where you live. This might be an apartment, a villa, a building, or even a piece of land. Think of it as your personal space or home. It’s possible to use this residential property to get a mortgage loan.
This is something you can do whether you live there (self-occupied), rent it out to others, or even if it’s empty and waiting for use. As long as you’re the owner, it’s something you can use as a guarantee for a loan.
2. Commercial property
Commercial properties are all about business use, not living. If a property is used to make money or carry out business activities, it’s commercial. This category includes a variety of places like offices, schools, gyms, shops, warehouses, and medical centers.
You can use these properties for the best loan against property in India, pledging them as a guarantee. Doesn’t matter if they’re being rented out or are empty, as long as no legal issues are attached to their ownership or title. It’s all about turning business spaces into potential financial resources when needed.
3. Co-owned property
A co-owned property is simply a property owned by more than one person. If you’re a co-owner wanting a mortgage, you’ll need approval and a No Objection Certificate (NOC) from the other owners to move forward with a loan application. Different lenders might have varied rules about the relationships between co-owners.
Getting a mortgage is typically straightforward for married couples but might be approached with caution for parent-child ownership, especially in India where inheritance laws can be complex. Always check the specific requirements with your lender!
4. Industrial Properties
Industrial properties, like factories, can help you get a Loan Against Property. These properties must be located in areas officially marked for industrial use and follow all local and state rules.
The person applying for the loan must be the clear owner of the property, meaning they have all the legal documents proving it’s theirs. This ensures the loan process is smooth and straightforward. Additionally, it helps to avoid any potential hitches related to property ownership during the loan application and approval stages.
5. Agricultural Properties
You can use the land for a Loan Against Property if it’s labeled as non-agricultural and you have clear proof that you own it. But keep in mind that loans tend to be smaller for land compared to properties with buildings on them.
6. Leased Properties
You can use leased properties as security for a Loan Against Property, but there are a few conditions. Firstly, the lease agreement must still have at least 30 years left on it. Additionally, the borrower needs to have the legal right to sublease the property.
This ensures the lender has adequate security over the period of the loan and safeguards the borrower’s rights to utilize the property effectively during this time. It’s always key to check and understand all terms of the lease agreement and loan to ensure they are used effectively and lawfully in obtaining finance.
Lending against existing properties is one of the simplest ways to obtain money. It has a number of benefits and can be a great way to fund important obligations and expenses.
If you are in need of money and want to use the loan against the property concept, get in touch with AGIL. We provide the best loan services in Ahmedabad, with fast disbursement and minimal paperwork.
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