Home Real Estate A brief analysis of business loans secured against property

A brief analysis of business loans secured against property

loan against property
loan against property

Business loans secured against property are a type of funding whereby individuals get funds by giving away their property rights to the lender in case of any default. The said properties are kept as collateral or mortgage till the end of the loan tenure. The loan amount depends on the loan-to-value ratio which refers to the valuation of the property according to the current market rate and based on that the loan amount is decided. You can start your business from scratch and develop it step by step with the help of a loan against property. The secured nature of this loan makes it a better alternative to a personal loan which is mostly unsecured.

Features of business loans secured against property

  • You can avail amounts as high as 1 crore to utilize in your business activities. A business loan secured against property is always a high-value financing option to meet your business necessities by relying on your property value.
  • With a flexible repayment schedule, you can pay back your loan for a duration of 15 to 20 years.
  • You can easily get this business loan against the property whether you are self-employed or salaried.
  • Flexible paperwork and quick approval help you get this loan with a few documents

You have the flexibility in spending this loan to meet any sort of expense whether it is a medical emergency, overseas education, wedding, or traveling. If you are using it for business purposes, you can use it as seed capital to start a new venture or to expand your existing business. There is no hard and fast rule in spending the loan amount.

Eligibility to a business loan against property

  • If you are self-employed the age criteria are between 18 to 80 years and if you are salaried your age should be between 25 to 70 years. The monthly salary requirement may vary from lender to lender.
  • You should own a residential or commercial property registered in your name in a place where the lender operates
  • You should have a CIBIL score of 720 or more than that
  • Your business venture should be a minimum of 3 years old

Documents to be submitted with a business loan against property

  • You must submit your KYC documents which include business entity proof, incorporation certificate, partnership deed, etc, and address proof of your residence and business
  • Business bank statements for the last 6 months
  • Salary slips if any for 2 months. This applies if you are a salaried individual and want to start your own business
  • You must show proof of income tax returns.
  • The banking account of the borrower should be at least 1 year old
  • Your collateral property documents include the sale deed, electricity bill, house tax receipt, water bill, gas pipeline bill, etc.

Business loans against property are secured in nature

A business loan against property is a risk-free option as by providing a guarantee of your property you will give assurance to the lender that you will pay back the amount in the due course of time. If you fail to repay the amount, the lender will take legal action against you to recover the loan amount by appropriating the collateral property. As this type of loan minimizes the risk to the lender, it is offered at a comfortable interest rate and longer repayment options.

The interest rate on business loans secured against property could vary from 13 to 16 percent per annum depending on the lender. When it comes to the repayment tenure, you will get an extended period to repay your loan amount. Longer repayment duration means low equated monthly installments or EMIs which will not hamper your monthly budget.

The emi calculator for lap is a wonderful tool to guide you with how many monthly installments you will pay together with the interest rate till the completion of your loan. This tool offers better accuracy and faster results compared to the manual calculation of your EMIs and interest rates. It allows you quickly compare different loan schemes to grab the best offer for your business. By simply entering the loan details you can get an idea of your approximate monthly EMIs in seconds.

To conclude

You can build your business smoothly with the help of business loans secured against property. If you are contemplating starting your own venture sometime in the future, this is the best option available to meet your much-needed capital requirement. You can start working on your business idea today by checking how much loan eligibility you have with subsequent EMIs by using this emi calculator for lap with a press of a button and accordingly apply for a business loan against property online. Your chances of getting a loan are dim if you are not a salaried professional, but if you have a property listed in your name it becomes easier. So, this business loan against property is a viable alternative for those who are eagerly waiting to get funds to work on their start-up ventures.

Apart from this, if you are interested to know more about Quick Checklist of All the Property then visit our REAL ESTATE category