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Advantage And Disadvantages Of Loan Against Property

Financial emergencies and obligations might arise any time and when they do you require sufficient funds to help sail through them. You might not have sufficient funds in your savings to meet your financial requirements. This is when loans help. Loans give you the required money to fund your requirements and prove useful.

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Advantage And Disadvantages Of Loan Against Property

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  1. Advantage And Disadvantages Of Loan Against Property Financial emergencies and obligations might arise any time and when they do you         require sufficient funds to help sail through them. You might not have sufficient funds in               your savings to meet your financial requirements. This is when loans help. Loans give             you the required money to fund your requirements and prove useful. There are different               types of loans for different needs and a ​loan against property is one such loan which is                 quite popular. The loan is offered against the value of the property which you mortgage               to the lender and allows funds that can be used for anything.                                                                                                    A loan against property has many advantages and also some disadvantages. These             include the following –                Advantages of loan against property  ● Multipurpose loan The loan is a type of a personal loan which can be used for any need whether it is                   personal or commercial in nature                      ● High quantum Since the loan is offered against the value of the property, you can avail of substantial                 funds from the loan.                  ● Low-interest rates A loan against property is a secured loan as it is secured against the mortgage of the                 property. Being a secured loan the lender faces lower chances of defaults. As such, the               loan is offered at low-interest rates which are affordable for the borrower.                                   

  2. ● High repayment tenure You get repayment tenures of up to 15 to 20 years to pay off the loan. Such high tenures                   ensure that the EMIs are affordable and allow you to pay off the loan without burning               your pockets.                                        ● Flexibility on the usage of the mortgaged property Though you have to mortgage the property for availing the loan, you do not lose the             ownership of your property. You can continue using the mortgaged property for             residential or commercial purposes. Moreover, you can also let out the property to earn         rental incomes even when the property is mortgaged.                                                      ● Easy eligibility criteria The eligibility criteria for availing a ​loan against property are quite simple and basic. You               can, therefore, easily apply for the loan and avail it without any hassles.                  Disadvantages of loan against property  ● The loan is available only if you have a property You can avail a loan against property only if you are an owner of a property. Thus, the                   loan is not suitable for individuals having no property ownership.                    ● Bank can sell off your property If you default on repaying the loan, the lender has the authority to sell off your property                 to realize the outstanding loan. You, therefore, face a risk of losing your property.                    ● Long time for loan sanction Lenders sanction loans against property only after various formalities are conducted.           These include independent valuation of the property by the lender, scrutiny of the           documents of the property, credit check of the borrower, etc. Thus, the loan is not             available instantly for emergencies.                                                Though the loan has some disadvantages, the advantages outweigh them. Bear these             benefits and drawbacks of loan against property whenever you apply for the loan so that             you are well-informed.                                  This post was submitted at-

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