Owning a property can be beneficial in many ways. You can reside in it, use it for your business, lease it or use it to get a business loan against property. Commercial or residential, irrespective of the type of property you have, it is possible to get access to funds on the property. There are many lenders in the industry who will be happy to extend a loan to meet your requirements and when you have a property to hypothecate against it, the process will become easy and hassle-free.
There is a simple and convenient method of applying for a loan. The property should be under your name and it should have a clear title deed. If you own the property with someone else and are co-owners, you will automatically become co-applicants for the loan. It is important to remember that the property should not be mortgaged anywhere else.
How does hypothecation work?
Whenever you apply for a business loan against property, you need to provide the title deed of the property and the same will be hypothecated with the lender. It will be released once you have repaid the entire loan amount in full. If you fail to make the EMI payment on time due to some reason, the lender has the right to auction the property to recover the outstanding dues. However, this will be done after giving notice to you. If you make the payment in the meantime, the lender will not auction your property.
Tenure and interest rate
The loan amount will be based on the market value of your property, hence, it helps to have a valuation report before you proceed with a loan application. However, if you do not have one, the lender will hire a market valuer to get an estimate of the market value of the property. No lender offers a loan for 100% value of the property, they usually extend a loan for 65% of the value. Hence, once the market valuer estimates the value of your property, the lender will decide the loan amount. The rate of interest is lower than an unsecured loan because the risk associated with the loan is low. However, you can compare the same online and then proceed with the application. Choose a lender that offers a low interest loan. Further, the tenure will be long and flexible and can be adjusted to meet your needs.
Always use an EMI calculator
Whenever you apply for a loan, you need to keep the repayment terms in mind. The loan has to be repaid in EMIs over the tenure and it is difficult to calculate the EMI by yourself. This is why you should use an EMI calculator before signing on the loan documents. The calculator requires you to provide the loan amount and tenure. It is available on all lender’s websites and is free to use. Once you input the details, it will show the results in no time. Based on this estimate, you will be able to understand the EMI you need to pay every month. This will help make the right decision. If you think that the EMI amount is very high, you can ask for a longer tenure and make the repayment in time.
The business loan against property is a great way to expand the business and turn your goals into a reality. The secured loan is designed to help individuals make the most of their property and put it to good use. Since there is security with the lender, the rate of interest is low and you can enjoy friendly terms of repayment.
Many business owners in the industry have expanded their business and taken it to new heights with the loan. The biggest advantage is that you can use the funds for any purpose. In the business and there are no restrictions on it. Additionally, you can use any commercial or residential property for the loan. It should just be clear and under your name. The loan will be processed and approved without. Any delay and you will have the funds in your account in no time. Making it easier for you to make the most of the growth stage your business is in.