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Fulfil your dream by availing a property loan for your personal expenditures

Milestone events such as going for higher education, a marriage or even the birth of a child are a time for much rejoicing. While these events bring with them a lot of celebration, they could also be demanding in terms of finance. There would always be a nagging thought on how to successfully fund them. In such a situation, your hard-earned property could prove to be a strength. You can obtain a mortgage to organise funds for your personal expenditures. A loan against property is one that will help secure funds at short notice, and the process is hassle-free.

A mortgage harnesses the potential of your commercial or residential property to help meet your personal expenditures. If you are considering availing a property loan, it is advisable to approach a reputed financial institution that has extensive reach across the country and has an influential network of branches. Their relationship managers will utilise their expertise and knowledge to tailor a mortgage with customised features and a range of benefits. Your property could help you fulfil your dreams and goals conveniently and affordably.

While applying for a loan against property, it is advisable to familiarise yourself with some mortgage fundamentals. They include:

  • Principal amount - Principal is the sum that the lender will grant with certainty.
  • Interest rate - Interest rate refers to the cost of your mortgage. This is important as it determines the additional funds you need to repay along with the principal. The interest rates for a property loan ranges from 11-20% per annum (p.a.). But, with the right profile, you could negotiate and obtain a rate as low as 9% p.a.
  • Loan tenure - This refers to the period you are given to repay the principal along with interest and processing fees. The loan tenure for a mortgage could be as long as 15 years.
  • Equated Monthly Instalments (EMIs) - An EMI is calculated by dividing the sum of principal and interest over the loan tenure. EMI helps you conveniently repay your loan through a small amount every month.

Applying for a Property loan is a fairly simple process; you need to provide a few documents along with the application. Typically, these are the documents you would have to produce:

  • Recent photograph
  • Proof of identity, address and age
  • Bank statements
  • Proof of business existence, Company’s financials and Duly certified income tax returns (business and individual) in case of self-employed applicants
  • Form 16, Income Tax returns and pay-slips in case of salaried applicants
  • Copy of the Title Documents of the property and Approved Plan

Once the documents are verified and application fee processed, you could receive a principal of 50-60% of the property’s market value. Depending on the applicant’s profile, you could be eligible for a principal of up to 70% of the of the property’s market value. The eligibility is generally evaluated against the repayment capacity of the borrower. Repayment capacity is arrived at by assessing various factors such as borrower’s income, spouse’s income, age, qualification. It is recommended that you discuss your requirements with a Relationship Manager to understand your loan eligibility.

If you need funds for personal expenditure, obtaining a property loan for personal expenditure would be ideal. It is essential that you approach a reputed financial institution as they are trained to take care of sensitive property documents and records. It is best to consult a Relationship Manager to understand your loan eligibility and the best terms you can avail of.

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