Loan Against Property

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GST Suvidha Center WB093 offers Loan Against Property services designed to streamline your business operations. Visit us to experience professional, reliable, and personalized solutions.

Your property is one of your biggest assets. Apply for an easy loan on the property.
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A loan given or disbursed against the mortgage of property is a loan against property. It is a loan that can be availed by mortgaging your property. Whenever we mortgage property to a bank, a loan is sanctioned by the bank for the loan against property. it can be taken from banks and financial institutions against residential, commercial property Or any land may be agricultural land, commercial land or residential land, plot, etc.

Purpose

Fund your child’s education abroad
For funding any medical emergency
Wedding of your child
Funding the dream vacation
Business expansion

Kind of property : You can mortgage a self-occupied house as well as a rented residential property or it can be a piece of land that you own. However, it is necessary that the property is free from any kind of mortgage of litigation. Basically, the title of the property should be clear.

Advantages

Simple approval process : The process of approval for availing a LAP is comparatively simpler. Since these loans are secured, the scrutiny a loan application goes through is relatively lighter. This is opposed to unsecured business loans, where the risk factor is greater due to the absence of collateral. Hence the screening process for the latter is elaborate and time-consuming. In the fast-changing world of business, opportunities are short-lived. The relatively simpler and quicker loan approval process often proves crucial in allowing a business owner to take advantage of a market opportunity.

Lower interest rates : Since LAP is a secured loan, the interest rates are generally lower, when compared to various other types of loans available in the market. For a borrower with a favorable credit score and borrowing history, the low-interest LAP can prove to be the instrument of choice for meeting a wide range of financing requirements.

Flexible repayment tenure : A LAP comes with flexible repayment tenure, lasting anything between 10-15 years or even 20 years in case the loan amount is high. This gives the borrower plenty of time to repay the amount and thus reducing any unnecessary financial burden on his venture.

Moreover, the borrower gets the option of repaying their debt through equated monthly installments, or as overdrafts. The borrower’s credit score and account history, along with the value of their property, determines the overdraft limit.

Continuous ownership : In LAP the borrower continues to retain the ownership of the property. So, if the borrower is unable to repay the amount for any reason, they have the option to sell the property and settle the loan.

Pre-closure : LAP comes with an option to pre-pay the loan amount without penalties, except if the loan was on a fixed interest. This means that the overall interest burden and the tenure of the loan can be reduced by paying a small additional cost.

Optimum use of a property : Loan against property helps in unlocking the hidden value of a property. In case a borrower needs funds and he has a property to offer as collateral, he may consider leveraging the value of the property to satisfy his financial needs.

That way, the borrower can retain ownership of the property and can still secure a loan at a comparatively low rate of interest.

Eligibility

You are eligible if you are:

An individual who is an Employee or a Professional, self-employed or an income tax assesses or NRIs
Minimum net monthly income of Rs. 25000/-
Loan under LAP should be liquidated before the eldest borrower attains the age of 70 years.

Documents Required

For Salaried :

Latest Salary Slips
Bank account statements of the previous 3 month
PAN Card/Aadhaar Card
Address Proof
IT Returns
Copy of the documents of the property to be mortgaged

For Self-Employed :

Bank account statements of the previous 6 months
PAN Card/Aadhaar Card
Address Proof
Copy of the documents of the property to be mortgaged

Benefits of Availing LAPs Through GST Suvidha Centers

Convenience: GSCs are located across the country, making it easier for individuals and businesses to access LAP services without having to travel long distances.
Accessibility: GSCs often have simplified loan application processes and reduced documentation requirements, making it more accessible for those with varying credit profiles.
Tailored Solutions: GSC staff can assess the specific financial needs of individuals and businesses to recommend suitable LAP products. This personalized approach ensures that borrowers receive the most appropriate financing options.
Competitive Rates: GSCs may have negotiated competitive interest rates with lending partners, offering individuals and businesses attractive terms.

Additional Services: Apart from LAPs, GSCs also provide GST-related services, making them a comprehensive platform for financial needs.

Types of LAPs Offered at GST Suvidha Centers

Residential LAPs: For individuals looking to borrow against their residential property for various purposes, such as home renovations, education, or debt consolidation.
Commercial LAPs: For businesses seeking funding for expansion, working capital, or other business-related activities.

Agricultural LAPs: For individuals and businesses involved in agriculture, providing financial assistance against agricultural land or property.

How to Apply for a LAP Through a GST Suvidha Center

Visit a Nearby GSC: Locate a GST Suvidha Center in your area using the official GST portal or online directories.
Consult with Staff: Discuss your loan requirements, including the property you wish to use as collateral, the loan amount, and the purpose of the loan, with the GSC staff.
Submit Documentation: Provide the necessary documents, such as property ownership documents, income proof, credit score, and valuation report, as per the requirements of the loan provider.
Application Processing: The GSC staff will process your loan application and coordinate with the lending partner.
Loan Approval and Disbursement: If your loan is approved, the funds will be disbursed to your account according to the agreed-upon terms.

Additional Considerations

Eligibility Criteria: Different LAP products have specific eligibility criteria, such as minimum income requirements, credit score, and property value.
Interest Rates and Repayment Terms: Interest rates and repayment terms may vary depending on the loan type, borrower’s profile, and market conditions.
Documentation Requirements: Ensure you have all the necessary documents ready before applying for a LAP to avoid delays.
Valuation Process: The lender may require a property valuation to determine the loan-to-value (LTV) ratio.

Loan Processing Time: The processing time for LAPs may vary depending on the complexity of the application and the lender’s policies.

Conclusion

GST Suvidha Centers have become valuable resources for individuals and businesses seeking substantial financial assistance through loans against property. By offering convenience, accessibility, and tailored solutions, these centers have simplified the loan application process. Whether you need funds for home renovations, business expansion, or other financial needs, visiting a GST Suvidha Center can be a beneficial step towards securing the property-backed loan you require.

FAQ's

Loan Against Property

Q1. 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 loan against property for anything other than speculative or non-prohibitive activities.

Q2. How does the lending bank decide on the amount I can get as loan against property?

Basically, the bank looks at your repayment capacity. For calculating the loan amount, your income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history are taken into consideration. However the eligibility of loan does not, generally, exceed 60 percent of the market value of the property.

Q3. Can there be a co-applicant for loan against property? If yes, who can be co-applicant?

You can include your spuse as a co-applicant and that results in a higher amount being lent. However, if the property is co-owned, all co-owners mandatorily need to be co-applicants.

Q4. 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.

Q5. How is the rate of interest on loan against property calculated?

Interest is calculated on daily reducing balance. Your monthly out-go (equated monthly installment – EMI) is much lower as compared to the interest on annual reducing balance.

Q6. What is the tenure of the loan?

Loans against property has a maximum tenure of 15 years, subject to the condition it does not exceed your retirement age. This condition however can be flexible in certain cases

Q7. How to repay my loan?

You repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.

Calculate Your Loan Against Property EMI’s here

Q8. What security will I have to provide?

As the name implies you need to mortgage your property for availing this loan. This mortgage is Equitable mortgage by Memorandum of Entry by way of deposit of title deeds and/or such other collateral security, as may be necessary. Collateral security for by way of assignment of insurance policy or any such other assignable financial instruments are also required, as security to loan if deem necessary by the Bank.

Please do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation which is likely to affect the title to the property adversely.

Q9. Can I repay the loan ahead of schedule?

Yes. Prepayment is possible and there is no prepayment fee if you repay the loan after six months of availing the loan if you pay from your own source of funds without transferring the loan.

Q10. How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?

The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised repayment schedule worked out. The new rate of interest of loan against property will be as per the currently applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A letter is given to the customer confirming the change of status.