Six Common Myths About Loan Against Property

A Loan against property lets you leverage the property for your personal use as collateral to borrow money for monetary emergencies.

Shubham Housing Development Finance Company is offering a Loan against Property to manage your high-end expenses with ease. Be it financing your child's education, fund a wedding in the family, or even handling unforeseen medical expenses, this loan enables you to do it all.

Despite its advantages, there are several misconceptions that people have about Loan against Property. 

So, let us take a look at the six myths about loan against property and the truth behind them:

Myth 1: You cannot use the property that you pledge

This is a common misconception that many of us have about loan against property. It is essential to understand that there are no constraints on using the property even after you have pledged the property. Throughout the tenure of your loan, you have the absolute right to use the property you have secured funds against. The property can come under the control of the financial institution's ownership only if you default on your loan. In such a case, the financial institution has the right to sell the property to raise funds from it.

Myth 2: Better to take a loan at a higher interest rate than pledging your home as collateral

One more misconception that most people think is that you should never pledge your home as collateral for a loan. However, the reality is that having your home as collateral carries no risk if you are consistent with your repayment plan. By and large, these loans are secured, and so, they have an affordable rate of interest that you can repay over a lengthy tenor. It offers you high-value funds at comparatively lower interest rates than other loans.

Therefore, as compared to other loans, a Loan against property is a financial tool that supports you in the long run and helps maintain stability.

Myth 3: To qualify for the loan, you need to be in a high-income bracket

It is not a hard and fast rule for you to fall under a high-income bracket to avail the loan. At Shubham Housing finance, we provide you based on your repayment capacity towards the loan you have taken.

Myth 4: You can borrow a loan amounting to the full value of the property

This is one of the biggest myth that people have against loans against property. No financial institution in India provides you loan up to 100% of the property's property's market value.

At Shubham Housing Finance depend on the valuation of mortgaged property we provide you with the loan. Usually, we approve loans up to 70 - 80% of the property's market value. Factors such as location and age of the property, infrastructure, geographical stability, etc. are also considered during the evaluation process. Loan disbursal time may usually range anywhere between one week to three weeks.

Myth 5: You can only get a loan against property a commercial property

This is far from the truth. At Shubham Housing finance, you can take a loan by pledging a residential property. Additionally, you can use the funds to purchase a property as well. Moreover, there are no restrictions on usage; you can use it for financing education or a destination wedding.

To take advantage of these features, you can choose for Shubham Loan against Property for a hassle-free loan application and enjoy flexible tenure and quick approval of your loan.

Myth 6: You need to have a good CIBIL/Bureau Score

Though the CIBIL/ Bureau score has a significant role to play, with Shubham Housing Finance, anyone with a low CIBIL/ Bureau score can apply for a loan against property. Shubham Housing finance provides you with a loan based on the applicant's eligibility criteria and their monthly income.

If you have any doubts or you want to know more about Shubham Loan against property or any other loans, do let us know in the comment section below!. We are always there to help you.

Happy Reading!