Loan against home is provided when you are looking forward to invest in real estate. Home loan is provided at a certain percentage based on the market value of your existing property. Ideally the percentage falls between 40% – 60%.
It is not a hard and fast rule that you have to buy a home against a home loan for a property. There are companies and banks that provide personal loan. But, if you are unaware then loan interest is something which can make or break your deal. Personal loans offer higher interest rates and they vary between 16% – 21%. But taking home loan against home means you will have to pay interest at the rate of close to 15%. These statistics may vary. But there is a huge difference for sure between these interest rates whatsoever. Though, the preferred option can be Home loan against property.
If you are applying for a loan against home through Bank, below is the process involved in its application:
- If your property has owners more than one, then it is viable that you apply for the loan together.
- Bank checks all the documents related to your property and verifies electricity, telephone and residence proof. Identity proof such as Pancard, Passport, Aadhar card or a Voter ID card have become a must submission at a bank. (Any one or any of the combinations are must submission for a loan at a bank).
- Not just this, if you are employed or self-employed bank requires bank statement for the past 6 months and 2 years respectively.
- The minimum age for borrowing a loan is 24 years and maximum is 60. For a self-employed individual the age limit is 65.
Bank reviews your credit limit by going through your timely payment track of other bills etc, before giving an OK for any Property loans. Based on the information collated, bank decides whether to give consideration to your loan or no.
The general rule for buying a property and for applying a loan request depends on solid reasons and assurance of your repayment for that loan. Hence, suggested; Do your study well. Get in touch with the bank or the financial company and be prepared with the documents asked for to avoid delay in the process of home loan for buying a new property.