When a sudden fund requirement is pressing upon your head, loan against property by finance companies is an important financial tool which can be utilised to fulfil the urgent requirement of cash flow. The non-banking finance companies are considered to be more profitable than the banks as they provide the customers with much cheaper loans. Unlike NBFCs, Banks have more stringent regulations, terms and conditions coupled with cumbersome paperwork. Since the requirement of loans and other forms of finance are increasing day by day due to the economically developing nature of India, NBFCs are an important segment of the economic society.
The banks usually focus upon the large business owners while the finance companies are concentrating their funds to the small business owners and other borrowers. The NBFCs provide the borrower with easier and faster processing by maintaining better connectivity and simpler registration processes. For borrowers with lower credit scores who do not match up to the credit score requirement as stated by the banks can negotiate a lower interest rate by availing loans against property by finance companies.
The NBFCs also provide leverage to borrowers for repaying their regular interest amount throughout the term of the loan and pay the principal amount in the end. While computing the loan amount against a property, the financial companies take the statutory charges like stamp duty and other enlistments into consideration and have no penalty clauses, therefore, the repayment of loans is easier as compared to banks.
The amount of loan sanctioned by the financial companies are much higher than the banks and thus, the NBFCs are outperforming the banks.
LOAN AGAINST PROPERTY DOCUMENTS:
In case of a LAP, the lender has a security to rely upon. Thus, there is minimal documentation concerning the loan. Make sure you possess all the right documents as stated by the loan scheme. If the loan is against a joint property, you must produce documents of both the parties.
- Self attested application with a photograph attached.
- Proof of Identity: Pan Card/ Passport/ Voter ID/ Driving Licence/ Aadhar Card.
- Residential Proof: Aadhar Card/ Ration Card/ Voter ID/ Driving Licence/ Passport/ Electricity or Water Bills.
- Property’s Documentation: Legal property documents that have been authorised by the Government of India. For example:- Registration Certificate, Original Sales Deed, Property Tax Receipts, NOC from the Society and an Allotment- Possession Letter.
- Income Proof: Latest Income Tax Return Certificate, Salary Slips, Form 16, Audited Financial Sheet, Qualification Certificate, Certificate of Practice, Shop Act Licence, Sales Tax Certificate, etc.
PROCESS OF APPLICATION:
A property can act as a rescue from painstakingly high interest rates of an unsecured loan. By applying for a loan against property by finance companies you can retain any asset while meeting your miscellaneous other immediate financial requirements. As a property owner you can pledge your residential, commercial, or industrial property to meet your business monetary needs. You can borrow on the grounds of the market value of your property, usually banks sanction up to 65% of the market value of the property mortgaged.
- The borrower must visit the website or the regional office of the financial lender to apply for the loan online.
- You might have to pay a nominal application fee which includes the cost of legal verification process and evaluation of your property. Furthermore, you will be provided with a registration number or reference number for the purpose of facilitating future inquiry.
- The consumer support team of the lending institution will contact the applicant and request for the submission of relevant documents.
- The lender will verify the documents submitted followed by an inspection of the property of the applicant.
- Using your application reference number, you can check the status of your loan application on the website of the lender.
- If the application is approved, then the loan amount will be credited in the bank account of the borrower.
Due to no complicated procedure and since there is no restriction as such, you can use a loan against property by finance companies for any outstanding bill or simple fund requirements of your business with barely any documentation while also contributing towards growing our country economically. We must simply see it as a win-win situation and dive into it for an amazing financial experience and a smooth lifestyle.