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Loans have become a convenient financial solution for arranging funds to meet any kind of need, be it personal or professional. Be it buying a new house, or car, arranging money for your child's education, or any other purpose, you can get a loan as per your requirement. There are many types of loans available in the market, such as – personal loans, gold loans, wedding loans, etc., but many people do not know about loans against property. Do you know what kind of loan this is? Let's find out.
What is a loan against property?
A Loan Against Property, as the name suggests, is a loan that is either owned by the applicant or by his guarantor, who is usually the parent. is given in exchange for the value of the property. This property is mortgaged, which means that the property papers and legal ownership of the property remain with the bank till the loan is repaid.

Features of Mortgage Loan
Loan Against Property or Mortgage loan has certain unique features that are different from other types of loans.
It is considered a secured loan as it is provided against the value of an immovable asset such as a property.
The purpose of this loan can be for both personal or business funding.
The maximum amount that can be exchanged for a property is between 60% and 80% of the latest market value of that property. This ratio is called the loan-to-value ratio.
For Loan Against Property, the property should be in the name of you or your co-applicant. It can be a residential or commercial property, but commercial properties undergo further scrutiny and scrutiny.
The interest rates are very low as the property is mortgaged as the security of the loan. This reduces the risk of default in payment on the part of the borrower.
Banks offer the facility of a longer repayment tenure, which can be up to 15 years.
Vacant land, as well as rented residential property, can also be mortgaged for availing loan.

Loan Against Property Eligibility
Although the main criterion for the loan is to have the property in the name of the applicant, most of the banks also ask for certain other eligibility requirements to be fulfilled which are as follows:
You must be an employed person
The minimum age limit is 23 to 25 years and the maximum age to repay the loan is 65 to 70 years
To ensure that you earn money to repay the loan
Your financial status, credit score, and income are also examined to determine your eligibility

Benefits of taking a loan against property
Taking a loan against property is a better option than taking a personal or gold loan if you have a property. Following are some of the reasons why this type of loan is better for taking a large loan amount:
You can use your property to take a loan without transferring your ownership
Loan against property interest rates is much lower as compared to personal loans
Since the value of the property is quite high, you can get a much bigger loan as compared to a personal loan because in the case of a personal loan you get a loan based on your income
The repayment deadline is long, so you get plenty of time to pay it off