Do you have any idea about the mortgage loan or the Loan Against Property (LAP loan)?
With a Loan Against Property (LAP) you can enjoy a large amount after pledging your property. This mortgage loan is a secured one, and it comes with a lower rate of interest.
Mortgage loans have for long served as a critical source of high-value financing for many individuals. Mortgage loans are long-term credits with repayment tenor extending up to 20 years or more. Various financial institutions bring mortgage loan calculators which help borrowers to make such decisions efficiently. These calculators allow you to not only estimate the EMIs but also other essential values that can have an impact on your finances in the long run.
Yes, mortgage loan interest rates are on the lower side because of the collateral.
If you wish to know about the concept, types, eligibility of mortgage loan, read on.
What is a mortgage loan?
A mortgage loan is a secured loan that an eligible candidate can avail of after keeping an immovable asset as security with the creditor. The asset in question could be a residential or commercial property or even heavy machinery.
Mortgage loans have repayment tenor ranging up to 20 years. The mortgage loan interest rates are lower. And it helps a borrower repay reduced EMIs and make savings.
The funds availed out of the loan against property is higher and could be used without restrictions. It makes the mortgage loan facility one of the preferred options. It is when it comes to acquiring a significant amount without usage restrictions.
The loan against property calculator can also be used on a lender’s website. It can help anyone know an amount they can avail of if they apply for a mortgage loan.
The loan can be used for multi purpose such as funds for education to a grand wedding to consolidate debts to managing medical emergencies and more.
Nowadays, it is possible to apply for a mortgage loan with India’s top lenders like banks and non-banking finance companies (NBFCs) and more.
What are the eligibility criteria for a mortgage loan?
If you have the required eligibility for a loan against property, you may be able to avail of the facility without hassles.
- Borrower age should be between 33 and 58 years.
- Emplyment should be with an MNC, Private or a Public Limited Company.
- The application has to be a resident citizen of India.
Along with these conditions, you also have to furnish a few documents, such as:
- Latest Salary slips.
- Last 3 months’ bank account statements.
- PAN Card/Aadhaar Card.
- Address proof.
- Copy of the property you want to mortgage.
- IT Returns.
These eligibility terms and documents are standard and may vary from lenders to lenders.
What are the types of mortgage loans?
In India, you can find 6 types of mortgage. Let’s take a quick look at each of them:
- Simple Mortgage
Here the borrower mortgages an immovable asset to avail of a loan. A lender has the authority to sell it in case of repayment failure.
- Usufructuary Mortgage
The possession of the property gets transferred to the lender. It is eligible to receive gains like rent on it without creating any liability on the borrower.
- English Mortgage
It leads to the establishment of personal liability on the borrower. The mortgaged property is transferred to the lender. It is on the condition that the
successful loan repayment will lead to its recovery.
- Mortgage by Conditional Sale
A borrower sells off the property with conditions that it becomes effective. It is in the event of the repayment but becomes legal on successful repayment.
- Mortgage by Title Deed Deposit
In this, the borrower deposits property being mortgaged with the lender to get the loan.
- Anomalous Mortgage
An Anomalous Mortgage is something that does not come under any of the above mortgage loan types.
You are now aware of the concept of a mortgage loan, its eligibility documents and its types. Based on your eligibility and needs, you may apply for one and get a considerable amount to cover your needs.