Loan Against Property for Self Employed
What is a loan against property for self-employed?
It is a secured loan where the property is pledged to borrow the amount from the bank. The loan can be availed against property owned by the borrower for residential, commercial or as an industry purpose. In comparison to business loans, loan against property for self-employed is a better option when self-employed individuals want to meet any kind of personal requirements with a bigger amount and need more repayment time with less interest rates. A loan is provided by the banks which is usually 50%-80% of market value of the property mortgaged, depending upon the type of property (i.e. residential, commercial or industrial).
Why should one opt for Loan against property for Self-employed?
Loan against property for self-employed is a good option for the self-employed individual. Loan against property for self-employed offers wider benefits to the customers in comparison to other loans like a business loan.
Considering most financial institutions offer it easily, it is conveniently available as a secured loan. Loan against property for self-employed has better tenures and a bigger amount is sanctioned against property. Also, interest rates are much lower to business loans. Hence this makes it a preferred option.
Which are the documents to be submitted for taking a loan against property for self-employed?
- Personal Documents
- Application form with Passport Size Photographs of all applicants and co-applicants.
- PAN Card of applicant and co-applicant.
- Identity Proof - Voter ID / Driving License / Passport / Aadhar Card.
- Address Proof - Voter ID / Driving License / Passport / Telephone Bill / Electricity Bill.
- Ownership proof of residence and office either in the name of the applicant or jointly with family members.
- Financial Documents
- Latest audited ITR and financials for the last 3 years which include Balance Sheet, Profit & Loss A/c, Computation of Income along with all schedules and audit report.
- Past 12 months Bank statements from the borrower's main account/s as mentioned in the Balance Sheet for the latest year.
- GST returns of the last 12 months.
- Sanction letter and repayment track of any running loan.
How to apply?
LoansJagat has a tie-up with various banks who offer customized Loan against property for self-employed depending upon your requirement. An applicant answers 2 basic criteria of questions which are based on personal & financial numbers of the business. Basis reply, the system automatically shows various options available to the borrower from different banks to choose and decide.
Once decided LoansJagat gives the option for proceeding further either online or offline with documentation process. During this journey, a loan expert from the company helps you out for expediting the process. The borrower has access to track the loan application.
Why should I go with LoansJagat?
We take pride in having the expertise to cater to the requirement seamlessly since its inception which is 2002. Our dedicated loan expert provides you with excellent customer experience, our efforts have been recognized by various institutions and we have an association with 40 banks and NBFCs which gives customers a wide range of option to choose from. We are a process-oriented and digitised company that safeguards the interests of customers and ensures the confidentiality of their personal data.
Going to take Loan against Property for self-employed. Avoid these mistakes!
Loan against property for self-employed is the most popular product offered by the bank, it is a secured loan and one should be clear about the details of the product before taking it.
Raghav runs a travel agency. In order to expand his current business valuing Rs.50 lakh, he wants to take Rs.25 lakh as a loan in order to expand his business in other cities. Following mistakes should be avoided while filing a loan application to ensure a smooth loan experience:
- Clear Property Chain - Clear and Complete property papers chain of the property should be in place. Along with clear knowledge that not the entire amount basis valuation of property can be expected as a loan from the bank. Hence, it's better to have a proper study about your property papers and its past buyers and sellers to access loan easily.
- Rates - Business loan interest rates are more than loan against property for self-employed. In case the bank is charging you more or equivalent to business loan rates than it's better to check with other financial institution. LoansJagat helps businesses to get a clear comparison.
- Ownership - In case property has co-owners, it is better to have their documents in place as well along with their consent without which documentation can be on hold.
- Custody - Be very clear to read the terms and conditions like ownership and charges in case of late payments or inability to repay back the loan. The borrower has the right to utilize the pledged property, but the bank has the right to take it when one defaults.
Always take a well-informed decision!
Compare and Apply Loan Against Property with Best Intereset Rates in India
Who can avail a loan against property ?
Individuals – salaried/ professionals/ self-employed
Non-individual entities - proprietorship firms/ partnership firms/ private limited companies/ public limited companies.
How much loan can I avail against the property ?
The loan amount depends on the property type, valuation and bank’s policy, Generally, you can get a loan for maximum up to 100% of the property value.
What is the eligibility for loan against property ?
- Anyone aged between 22 and 65 years who is not retired is eligible
- Your income Assets and liabilities
- Credit score and history (the prospect of getting a loan increases with a good credit score)
- The type and value of property
- Residential status.
My property is co-owned by my parents/ spouse/ relatives. Can I apply for a loan individually or do I need a co-applicant ?
If the property is co-owned, all co-owners need to be co-applicants.
What is the loan processing time for LAP ?
It usually takes 7-15 working days after all the documents are submitted. The process includes evaluating your property value through a credit, legal and technical accessor.
How would the value of my property be determined ?
It will be determined through a valuation conducted by independent credit accessor appointed by the banks/NBFCs.
How do I apply for a loan against property ?
You can first compare among different banks and NBFCs for the loan amount, Rate of Interest, Time period and others facilities provided by them on the loans jagat platform and than as per your convenience you can apply both online as well as offline.
Do I need a co-applicant for this loan ?
A co-applicant for loan against property is required if you want to support better financial position to avail higher loan amount. Also co-applicant is required mandatory when the property being mortgaged is owned by more than one person. In all such cases, all co-owners of the property mandatorily become co-applicants.
What do you mean by the market value of a property ?
The market value of a property is the estimated value in terms of money that a property can raise if it is sold at prevailing conditions.
For how long can I take a loan against property and what interest rate will I be charged ?
The tenure of a loan against property usually can be as long as 15 years, with interest rates typically ranging from 8.75% to 15.75%. The exact tenure and interest rate on your loan may vary to a certain extent from one lender to another.
Can NRIs avail loans against property ?
Yes, several financial institutes offer loans against property to NRIs, subject to verification of all documents.
What can Loan against Property be used for ?
Any loan against a residential or commercial property can be used for both personal and business purposes. In fact, you can use it for anything other than speculative or non-prohibitive activities.
What are the processing fees for such a loan ?
Processing fee for loan against any property varies from bank to bank and is generally around 1 percent.
Does one have to provide any security to avail this loan? If yes, what kind of security ?
Yes, a loan against property can be availed only after attaching the property as security. The property so attached should have clear titles and should be free from encumbrance. It should not have any existing loan, mortgage or litigation which can impact the title of the property.
Are self-employed individuals eligible for loan against property ?
Yes, self-employed individuals can avail of this loan provided they have sufficient documents and repayment capacity.
Does the property in question have to be insured ?
Yes, most banks require the property to be insured before providing a loan.
How does one get back the property pledged as security ?
The property pledged as security will be returned back to the owner once the entire loan amount is cleared and there are no pending dues.
Can a loan against property be availed against rented property ?
No, Loan against property can only be availedagainst own property of the applicant(whether Residential or Commercial or Industrial).
Why should I opt for a Loan Against Property instead of a Personal and Business Loan ?
A Loan Against Property (LAP) has many advantages over these Loans. They include:
- A Higher Loan Amount: Typically, a LAP may offer a higher loan amount than these Loan.
- Lower rate of interest : With secured collateral rate of interest tends to be lower than these loan with no collateral.
- Longer tenure : ALAP can be availed for a long term than these Loans
What is the minimum and maximum amount of Loan Against Property that I can get ?
You can get a Loan Against Property from Rs. 10 lakhs to Rs. 50 Crores. Some of the factors that banks consider when deciding a loan amount are:
- The property’s registration
- The property’s market value
- Your requirement and eligibility
- Your income and repayment capacity
What documents do I need to submit along with my application for a Loan Against Property ?
Along with your application you need to submit the following documents:
- Proof of residence
- Proof of identity
- Certified/latest financial documents
- Copies of all property documents (which to be submitted as collateral).
How do I know if my property is eligible for loan against it ?
It depends upon various factors such as
- Area location of the property
- Size of the property
- Construction of the property
- Status of the property (i.e. Self- Occupied/Rented/Vacant)
- Type of the property (i.e. Residential/Commercial/Industrial)
Is salaried person eligible for loan against property Yes, a salaried person is eligible provided he/she gives suitable purpose of taking loan.
What are the physical events of loan against property ?
The physical events involved are
- The valuation of the property
- For higher loan amount, a personal discussion with the bankers to understand your financial position for the purpose of repayment of loan
- Residential and office verification.