Loans against property are not a new concept. It has been around for centuries now and has provided a plot point for several classic stories and different mediums. From the beginning, it has been a reliable way of borrowing money, as the property works as collateral and creates a beneficial exchange. Today, due to the advancements of the banking system, loan against property in Kolkata has become more interesting and secure than ever before. Hence, such loans have become pretty popular.

Understanding the Premise of the Loan

Before applying for such a loan, you need to understand that it is essentially a multi-purpose loan and can be accessed from a bank and other lending institutions. It will be better and wiser to choose a bank for this purpose, though. Another point you need to remember is that, while applying for the loan, you need to ensure that the property you are putting as collateral is currently owned by you. The amount of the loan will be 40 – 70% of the market value of the property. That range will depend on the lender’s policy, and both residential and commercial properties can be considered for this.

The Factors You Should be Knowing About

If you are thinking to apply for such a loan and do not know whether the decision will be wise or not, then researching and gathering information will help. By going through the data, you will become aware of certain factors which will assist in making an informed decision. The factors you should be mindful of are:

The Interest Rate You Have to Pay for the Loan

The interest rate you will get charged on this loan will be dependent on several factors, including but not limited to your income, amount of loan, tenure, credit history, and the lending institution you are choosing. The interest rates do differ from one bank to another too. Hence, it will be best to research and find out information regarding these points. Once you have the facts, it will be easier to create a comparative list and choose the most suitable of the options.

The Amount of Loan You Are Seeking

Usually, the amount of loan you will get depends on the market value of the property against which you will be getting the loan. The usual amount is 40 – 70% of the present market value of the property. However, if you are looking for a higher amount, it will be better to look through multiple options and choose the one offering the highest amount against the property.

The Repayment Time for the Loan Amount

Your research will reveal that most banks and lenders offer a flexible repayment tenure of about 15 years. With a longer loan tenure, you will get a lower EMI amount which will increase the affordability of the loan. However, you also need to understand that longer repayment tenure will mean increased cost of borrowing. The interest of the loan is calculated in a manner, and you will be paying more with a more extended repayment plan.