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A Can I raise a Loan against property to raise funds for a family function

Yes, you can. Special events and family functions are times that every family looks forward to. Whether it’s a wedding, the birth of a child or even a milestone birthday, these functions are all celebrated with great splendor and festivities. While these events are a great time for the entire family to gather and enjoy the revelry, major family functions can be financially demanding. There is always a nagging worry in the mind of the host. Will I be able to finance the entire event without any hiccups in the celebrations and sentiments?

In such a situation, your property can come to the rescue. Many banks and financial institutions offer a loan against residential or commercial property that you can easily avail of to meet significant expenses incurred during a family function. You can harness your property’s financial potential to raise funds to make sure that there are no roadblocks in your special event. These are the fundamentals you should be aware of while availing a Loan against Property:

  • Principal amount - The focus of any loan is the principal amount and the same holds true for a Loan against Property. Principal refers to the amount of loan that you are eligible for and the sum that the lender will provide with certainty. Further, the amount of the principal loan differs based on loan type which leads to financial ambiguity. The advantage of a Loan against Property is that you will get an assured amount of funds. This form of a loan guarantees 50-60% of the market value of the property. Additionally, the right financial profile will make you eligible for a loan amount as high as 70% of property’s market value.
  • Interest rate - Another important factor that you need to look into while obtaining a loan is the interest rate. Interest rate helps assess the amount of additional funds you would need to repay along with the principal amount. Interest rate depends on several factors including the borrower’s profile and loan type. The interest rate for a Loan against Property varies from 11-20% depending on multiple factors. However, with the right profile and negotiation, you can enjoy an interest as low as 9%.
  • Loan Tenure - The tenure of a loan is the period of time you get to repay the funds along with the interest amount and processing fees. A Loan against Property extends for as long as 15 years which gives you ample time to arrange for funds. However, as with any loan, the sooner you repay, the lower is the interest you pay.
  • Equated Monthly Instalments (EMIs) - An EMI is the sum you need to repay every month. An EMI is arrived at after calculating the principal and interest and dividing the same over the loan tenure.

If you are looking to perform a family function and wish to raise a Loan against Property, choose a reputed financial institution that has an extensive presence throughout the country and a significant network of branches. A Loan against Property can be fully tailored to suit your requirements, complete with unique benefits and a range of features such as balance transfer and additional finance. Make sure that the institution is equipped to handle your property documents and records with utmost sensitivity and professionalism.

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