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TYPES OF LOAN WE PROVIDE:-
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Home Loan
Home loans are one of the most preferred financial tools that enables an individual to purchase a plot of loan or a residential property instantly.
These loans are provided by Banks and housing finance companies (HFCs), and they have designed special schemes wide range of customers, including farmers, women, doctors, CA, etc.
Housing Loan Schemes & Offers
- Kotak Mahindra Bank – Best for Low-Interest Rate
- Low-interest rates start from 8.70% onwards and 8.75% onwards p.a. for salaried and self-employed individuals, respectively.
- Processing fee of up to 0.50% of the loan amount
- Loan tenure of up to 20 years
- Zero prepayment charges
- Balance transfer with top-up loan available
- Canara Bank Housing Loan – Best Interest Rate for Women
- Low-interest rates for women starting from 8.40% p.a. to 11.20% p.a. (Floating Rate).
- Maximum repayment tenure of 30 years or up to 70 years.
- Processing fee of up to 0.50% of the loan amount
- It Can be used to purchase or construct a house/flat
- Zero prepayment charges
- Axis Bank Home Loan – Best Interest Rate for Salaried Employees
- Low-interest rates starting from 8.70% p.a.
- Loan amounts of up to Rs.5 crore
- Maximum repayment tenure of 30 years
- Processing fee of up to 1% of the loan amount
- No prepayment/foreclosure charges
- HDFC Reach Home Loans for self-employed professionals
- Attractive interest rates start from 8.50% to 9.15% p.a. and 8.75% to 9.40% p.a.
- Flexible repayment tenure of up to 30 years
- Processing fee of 2% of the loan amount
- Minimal documentation with minimum income of Rs.2 lakh p.a.
- Add a woman co-owner for lower interest rates
- SBI Privilege Home Loan for Government Employees
- Low interest rates starting from 8.60% to 9.65% p.a.
- Zero processing fee
- Loan tenure of up to 30 years
- Reduced interest rates for women borrowers
- Interest concession when checkoff is provided
- PNB HFL Plot Loan – Best Home Loan for Plot and Construction
- Attractive rates starting from 9.50% p.a.
- Flexible loan tenure of up to 30 years
- Processing fee of up to 0.5% of the loan amount
- Loan enhancement in case of escalating costs
- Quick loan application and approval process
- SBI Realty Home Loan – Best Home Loan for Land Purchase
- Low-interest rates starting from 8.60% p.a.
- The Maximum tenure of ten years
- Processing fee of up to 0.35% of the loan amount
- Maximum loan amount of up to Rs.15 crore
- Interest rate concession for women borrowers
- SBI Smart Home Top-Up Loan – Best Top Up home loan
- Interest rates starting from 9.10% p.a. to 10.15% p.a.
- Processing fee of Rs.2,000 + GST (Minimum) to Rs.10,000 + GST (Maximum)
- Overdraft facility for loans above Rs.20 lakh
- Loan tenure of up to 30 years
- No prepayment penalty
- Union Awas Home Loan – Best for Low Credit Score
- Interest starts from 10.75% p.a. for credit scores below 600 for loans of up to Rs.30 lakh
- Moratorium period of up to 3 years for construction or purchase of a home
- Loan tenure of up to 30 years
- For agriculturists, quarterly/half-yearly/annual repayments instead of EMI can be availed
- Open to permanent employees of educational institutions and agriculturists with a yearly income of up to Rs.48,000 p.a.
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Home Loan Eligibility
The following is the list of eligibility criteria
| Eligibility Criteria | Requirement |
|---|---|
| Age | Minimum Age: 18 years and Maximum Age: 70 years |
| Resident Type | The applicant must be (anyone):
|
| Employment | The applicant can be (anyone):
|
| Net Annual Income | At least Rs.5-6 lakh depending on the type of employment |
| Residence | The applicant must have (anyone):
|
| Credit score | A good credit score of at least 750 or more obtained from a recognised credit bureau |
Documents Required for Home Loan
The following is the list of eligibility criteria
| Identity Proof (any one) | Residence Proof (any one) | Other Documents |
|---|---|---|
| Driving License | Copy of Electricity Bill/Water Bill/Telephone Bill | Employer Identity Card |
| PAN | Copy of valid Passport/Aadhaar Card/Driving License | Duly filled loan application form affixed with 3 passport size photographs |
| Voter ID | Loan account statement for the previous 12 months if the applicant has any other ongoing loan from other banks/financial institutions | |
| Valid Passport | Bank account statements for all the bank accounts owned by the applicant for the last six months |
Income Proof Documents
The following is the list of eligibility criteria
| For Self-employed Applicant/Co-applicant | For Salaried Applicant/Co-applicant |
|---|---|
| Income Tax Returns for the last 3 years | Salary Slips for the last three months |
| Certificate of Qualification (for Doctors/CA and other professionals) | Copy of Form 16 or Income Tax Returns for the last two years |
| Balance Sheet audited by a certified CA and Profit and Loss account for the previous 3 years | |
| Business License Details | |
| Business address proof | |
| TDS Certificate |
Documents Required from all Non-Resident Indians (NRIs) Applicants
The following is the list of eligibility criteria
| Identity Proof (any one) | Residence Proof (any one) | Other Documents |
|---|---|---|
| PAN | Telephone bill | Attested copy of the applicant’s/co-applicants’/guarantor’s valid passport and visa |
| Valid Passport | Electricity bill | Proof of residence indicating the applicant’s current overseas address |
| Driver’s License | Water bill | Employer Identity Card |
| Voter ID Card | Piped Gas bill | If the applicant is employed in the Merchant Navy, the applicant is required to submit a copy of Continuous Discharge Certificate (CDC) |
| Valid Passport | PIO Card issued by the Government of India in case the applicant/co-applicant is a Person of Indian Origin (PIO). | |
| Driving License | The completed loan application form duly filled with three passport size photographs of the applicant and co-applicants. | |
| Aadhaar Card | The attestation of the documents can be done by: 1. Indian Embassy/Consulate 2. Overseas Notary Public 3. FOs/Representative Offices 4. Officials of Branch/Sourcing Units based in India |
Income Proof Documents for NRI
The following is the list of eligibility criteria
| For Self-employed Applicant/Co-applicant | For Salaried Applicant/Co-applicant |
|---|---|
| Proof of income if the applicant/co-applicant is a self-employed professional/businessman. | Valid work permit |
| Business address proof | Employment contract (translated in English) attested by the employer/consulate/embassy/Indian foreign office if the contract is in another language. |
| Balance Sheet and Profit and Loss accounts audited by a certified CA for the last 2 years | Salary slips for the last 3 months |
| Individual Tax Return for the last 2 years – Not applicable to NRIs/PIOs located in the Middle East countries. | Bank statements indicating salary credit for the last 6 months |
| Bank statement of the individual’s as well as the business/company’s overseas account for the last 6 months. | Copy of the Identity Card issued by the current employer along with the latest salary slip (original). |
| – | Copy of the individual Tax Return for the last assessment year. – Not applicable to employees in the Merchant Navy and NRIs/PIOs located in the Middle East countries. |
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Property Papers:
- Agreement of Sale (anyone):
- Registered Agreement of Sale
- Stamped Agreement of Sale
- Allotment Letter
- Occupancy Certificate in case the property is a ready-to-move-in property
- Copy (blueprint) of the Approved Plan and Registered Development agreement of the builder
- Conveyance Deed in case of a new property
- Bank account statements indicating all payments made to the seller or builder
Home Loan Fees & Charges
Depending on the type of loan you are applying for, the following charges may be levied:
- Processing fees: This is a one-time non-refundable fee to be paid to the home loan provider after the loan application has been approved. The processing charge varies depending on the bank and the loan scheme you are applying for.
- Prepayment charges: The Prepayment penalty is the fee you will have to pay the lender if you plan on repaying your home loan before the completion of the loan tenure.
- Conversion fees: Some banks also charge a conversion fee when you switch to a different loan scheme to lower the interest rate associated with your current scheme.
- Cheque dishonour charges: The fee is levied when the loan provider finds that a cheque issued by the borrower is dishonoured due to insufficient funds in the borrower’s account.
- Fees on account of external opinion: In some cases, you should consult an external expert, such as a lawyer or a valuator, for their opinion on the loan. This fee should be paid directly to the concerned person, not the lending institution. This fee should be paid directly to the concerned person, not the lending institution.
- Home insurance: The premium should be paid directly to the concerned company during the term to ensure the insurance policy runs during the home loan tenure.
- Default charges: Loan providers also penalise delayed repayments, i.e. if you fail to make your Equated Monthly Instalments (EMIs) or Pre-EMIs on time. The defaulting charges vary from one bank to another.
- Incidental charges: This charge covers the expenses incurred by the bank to recover dues from a borrower who has failed to make his monthly instalments on time.
- Statutory/regulatory charges: The fee includes all costs associated with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), Memorandum of Entry and Deposit, and stamp duty. You can visit www.cersai.org.in to learn more about these charges.
- Photocopy of documents: The fee is payable to the bank if you require a photocopy of your home loan documents for personal needs.
- Change in loan term: Some banks also charge a nominal fee if you wish to change the tenure associated with your loan.
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Personal Loan
Today, an increasing number of people are applying for Personal Loans to meet their larger expenses. One of the reasons for the significant rise in the growing popularity of Personal Loan is that being an unsecured loan, it does not require any collateral and the processing time is quick. You can easily avail of a Personal Loan from any bank or a non-banking financial company of your choice. With the advent of the online services offered by the financial institutions, you can get the money within 48 hours.
What is Personal Loan – Everything about Personal Loan
Personal Loan is an unsecured credit provided by financial institutions based on criteria like employment history, repayment capacity, income level, profession and credit history. Personal Loan, which is also known as a consumer loan is a multi-purpose loan, which you can use to meet any of your immediate needs.
What are the benefits of availing of a Personal Loan?
- Unlike other types of loans like Home Loan or Gold Loan, where you must provide several documents, Personal Loans require minimum documents and the approval process is quick.
- With various financial institutions offering Personal Loan online services, the loan amount is disbursement within a few hours provided the lender is convinced of your repayment capacity.
- Another significant feature of Personal Loan is that the lenders offer you the flexibility to choose your loan tenure. Usually, Personal Loan tenure ranges from one to five years. So, you can select the loan term based on your repayment capacity. You should opt for a shorter loan, so that you can save on the interest payment and repay the amount faster.
What is the maximum amount that you can borrow?
The maximum amount that you can avail depends on your income level, your profession and the lender’s assessment of your loan application. Generally, the lenders sanction the loan based on their calculation, so that the EMI is not more than 40% – 50% of your monthly income. Also, the lenders consider if you have any dues while calculating the loan amount.
If you are a business owner or self-employed, the lender will determine the loan amount based on the profits earned and recorded in the profit and loss statement. If you are a salaried professional, the lender will determine the amount based on your salary and other liabilities.
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Is it possible to apply for a joint Personal Loan?
Yes, you can apply for a Personal Loan jointly with your spouse, or any other family members like parents or siblings. One of the benefits of applying for a Personal Loan with a co-borrower is that the lenders will consider both the applicants’ income while determining the loan amount. This means that you can apply for a higher loan. However, you must know that if the co-borrower has a poor credit history, there is a risk that the lender might reject your loan application.
What are the documents required for Personal Loan application?
Although the documentation varies from lender to lender, some of the essential documents you must provide along with your application form include:
- Proof of income (salary slip, bank account statement, ITR forms)
- Proof of residence and identity proof
- Certified copy of your degrees and licence (this is applicable only for self-employed applicants).
Are there any foreclosure charges?
If you decide to prepay the loan before the end of the actual term, the lender may levy penalty charges known as foreclosure fees. This penalty usually ranges from one to two percent of the outstanding amount.
Now that you know about Personal Loans, you can compare the loan offers from different lenders and apply for a Personal Loan online, and get the amount you need to meet your expenses.
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Apply for Personal Loans here to fulfil your financial needs.
Business Loan
A fantastic concept and a significant monetary commitment are necessary for starting and operating a successful firm. Getting a business loan in India may give you the financial assistance you need to realize your goals, whether you are an aspiring entrepreneur trying to launch a new firm or an existing business owner hoping to grow your operations.
Yet, choosing the best loan option for your company’s needs may be challenging, given the wide range of loan options available.
In this blog, we wish to provide you with a full review of your options for the best business loans in India.
Understanding Business Loan
A Business Loan is a particular kind of loan that gives firms and entrepreneurs money to help them with their funding needs.
It is a type of debt financing where a lender provides a borrower with a large sum of money, which is subsequently paid back over time with interest.
| Business Loans may be used for several things, including-
– Starting a new business – Growing an existing one – Buying inventory or equipment – Recruiting staff – Marketing and advertising campaigns – Running regular business operations, etc. |
Security is not necessarily required for business loans because they might be secured or unsecured. Collateral is an item that the borrower pledges as security for the loan. The lender may seize the collateral if a secured business loan in India is defaulted upon.
To determine the borrower’s creditworthiness and capacity to repay the loan, lenders may also have specific qualifying requirements for business loans, such as a minimum credit score, business age, and revenue.
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Factors to Consider Before Taking a Business Loan in India
Several critical elements must be considered to ensure you select the best choice for your firm when asking for a business loan.
Some crucial considerations include the following-
-
Loan Purpose
It would be best if you fully knew our financial needs before applying for a loan.
For example, is it for inventory, equipment, or other purposes, such as expansion? By understanding the loan’s purpose, you decide how much money you require and what kind of loan would be most appropriate for your requirements and creditworthiness.
-
Collateral
Specific lenders like real estate or machinery may need collateral to secure the loan. Ensure you know all the collateral that will be required and whether you feel comfortable utilizing it as collateral.
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Interest Rates and Costs
To discover the best price, shopping around and comparing offers from several lenders is vital. Various lenders offer varying interest rates and fees. Before accepting an offer, thoroughly research the interest rate, fees, and any other costs related to the loan.
-
Repayment Schedule
Verify that you are familiar with loan repayment terms, including the loan’s length, payback schedule and any fines associated with early or late payments.
-
Company Cash Flow
It is critical to comprehend your company’s cash flow and your plan for making loan payments. Ensure you have a clear strategy for using the loan proceeds to make money and recoup the debt.
-
The Reputation of the Lender
Before accepting a loan offer, do some research on the lender. Learn more about a lender’s reputation and level of customer service, and look for reviews and ratings from previous borrowers.
Types of Business Loans in India
Business, be it big or small, is most of the time in need of additional funds to meet day-to-day business requirements. The required funding also depends upon the nature of the business – is it capital-intensive and what is its stage of development, in terms of inception, growth, or maturity? Usually, businesses need funds the most in the initial stages and for growth perspectives. In this piece of article, we shall discuss almost all the types of business loans that are sanctioned by financial institutions in India.
Broadly there are 8 Types of Business Loans in India:
- Working Capital Loan
- Term Loan (Short & Long-term Loan)
- Letter of Credit
- Bill/Invoice Discounting
- Overdraft Facility
- Equipment Finance or Machinery Loan
- Loans under Govt. schemes
- POS Loans or Merchant Cash Advance
1) Working Capital Loan
Working capital loans are used by individuals, entrepreneurs, startups, and MSMEs to meet their daily business requirements and for various business expansion services, enhancing business cash flow, purchasing raw materials, addition in inventory/stock, paying salaries, hiring staff, etc. Working capital loans are majorly short-term loans of the loan amount up to Rs. 40 lakh wherein the repayment tenure is up to 12 months or may exceed business requirements. The interest rate offered by Banks/NBFCs is a bit higher, as compared to long-term loans or general business loans. In this type of loan, the lender sets a limit for the business to take a loan and the amount can be utilized for specific business purposes, only.
2) Term Loan
Term loan is a loan that is required to be repaid in regular payments over a set period of time. The term loan is categorized into short-term, intermediate-term and long-term loans. The repayment tenure of these two types ranges between 12 months to 5 years. Term loans that are of a shorter duration which is of 12 months are called short-term loans and loans up to 5 years or more are long-term loans. The collateral-free business loans are offered up to Rs. 2 crore, also can exceed depending upon business requirements. The repayment tenure for a term loan is finalized by the lender at the time of loan application.
3) Letter of Credit
Letter of credit is a type of credit limit used majorly in trading businesses in which the bank or lender offers a funding guarantee to enterprises that deal in international trade. Letter of credit can be utilized for both import and export purposes by entrepreneurs. Enterprises doing business overseas tend to deal with unknown suppliers, so for that, they require assurance of payment before performing any transaction. Therefore, a letter of credit plays a vital role in providing payment assurance to the suppliers.
4) Bill Discounting
Bill or Invoice Discounting is a funding facility in which the seller gets an amount in advance at discounted rates from the lender. This asks buyers to contribute in the form of interest rate in increasing the revenue of the financial institutions, in form of interest paid and from the monthly fee.
For example, You have sold goods to Mr. Singh, he has given you a letter of credit from the bank for 45 days, if you want to get money from the bank before 45 days, the bank will charge some interest rate from you, which in return will be called a discount for the seller. Further, let’s assume that the amount which you were supposed to get was Rs. 10 lakh on or after 45 days, by bank’s discount or interest rate of Rs. 50,000 you now get Rs. 9,50,000 in return from the bank. The buyer will anyhow deposit Rs. 10 lakh to the respective bank on the 45th day only.
5) Overdraft Facility
Overdraft facility is a funding type offered by a bank to its account holder to withdraw cash from his/her account even if the account balance is zero. The interest rate is charged only on the utilized amount from the sanctioned limit and on a daily basis. The credit limit that is sanctioned depends upon the account holder’s relationship with the bank, credit history, cash flows, and repayment history if any. The overdraft limit is revised every year and can be used in any manner if the interest is paid on time. An overdraft facility is offered against collateral/securities, especially in terms of FDs with the bank.
6) Equipment Finance or Machinery Loan
The equipment finance or machinery loan is a funding option offered to the borrowers for them to purchase new equipment/machinery or to upgrade the existing one. Equipment finance is used mainly by large enterprises and enterprises engaged in the manufacturing sector. Enterprises or business owners availing equipment finance or machinery loan also enjoy tax benefits. The interest rate, loan amount, and repayment tenure offered shall vary from lender to lender.
7) Loans under Govt. Schemes
The Government of India has initiated various loan schemes for individuals, MSMEs, women entrepreneurs, and other entities engaged in trading, services, and manufacturing sectors. The loans under government schemes are offered by various financial institutions, such as Private and Public Sector Banks, NBFCs, Regional Rural Banks (RRBs), Micro Finance Institutions (MFIs), Small Finance Banks (SFBs), etc. Some of the leading Govt. Loan schemes include Mudra Scheme under PMMY, PMEGP, CGTMSE, Standup India, Startup India, PSB Loans in 59 minutes, PMRY, etc.
8) Point-of-Sale (POS) Loans
POS Loans or Merchant Cash Advance is a mechanism in which a business owner running an enterprise pays a lump sum amount in advance to suppliers through his/her daily or future credit or debit card transactions. Several times, merchants of SMEs experience a short-term cash crunch. Hence, to reduce the liquidity crunch in the business, merchants opt for POS loans. The interest rate offered under POS loans is comparatively higher, as compared to other business loan types. The repayment facility is linked with debit or credit transactions Point of Sales (POS) machines installed at retail shops, grocery stores, supermarkets, and shopping malls.
As of now, you must have got a rough idea about the types of business loans offered by lending institutions in India. Business loans can be availed at nominal and attractive interest rates with flexible and easy EMIs. The best business loan deal can be picked by comparing various loan deals offered by leading private and public sector banks, NBFCs, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Micro Finance Institutions (MFIs), and various other banking and financial institutions.
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Loan Against Property
All you want to know about loan against property
A lot is going on in a person’s mind when he has to send his kids abroad for studies or maybe when he has to plan a wedding or needs funds to invest in his business. The first (and scary) thought is: “From where do I arrange all the money?” There are some creative ways to arrange these funds…like talking sweetly to your friends and relatives to convince them to lend you the money, but a better and self-sufficient way is to opt for a Loan Against (your) Property or Loan Against Property as it is popularly called.
So what exactly is a Loan Against Property and do you make one fall into your LAP? Read our detailed guide below that explains everything about a loan against property. A loan against property is exactly what its name implies. We disburse or provide loans against the mortgage of a property. It is obvious that if you want to take a loan against a property, then you have to be the owner of a property, preferably a self-occupied residential property. You may even get a loan against commercial property like a shop or factory but this is less likely as most banks, HFCs, and NBFCs prefer to provide LAP against residential properties only.
Loan Amount
So how much money can I raise against my property? Generally, lenders provide a loan of up to 60% of the property value as a loan. This percentage is called the loan to value or LTV. The maximum tenure offered is 10 years. The rate of interest will be higher than a home loan rate but lower than the interest rates on personal loans.
The tenure of 10 years that is offered for a LAP is higher than the tenure offered for personal loans which are likely to be a maximum of 5 years. This coupled with a lower rate of interest results in a lower EMI for the customer and hence makes a LAP more attractive than a personal loan. The funds can, of course, be used for short-term requirements like a marriage, college fees, hospital expenses, expansion of business, taking a vacation, etc. Some lenders offer
up to 15 years tenure which makes it even more attractive in terms of more affordable EMIs
The loan against property can be availed by both salaried and self-employed persons. The evaluation process is very quick and the documentation is generally very simple
What Is Loan Against Property And How Does It Work?
Loan against property (LAP) is a type of loan facility availed by individuals and businesses against the mortgage of a commercial or residential property. It is a secured loan, where the borrower pledges the property as collateral against the loan amount.
Once the documentation required by the lender is completed, a borrower can have as much as 70% of the property’s value. Depending on the lender’s policy, a borrower can repay the loan in a more extended period. Before you try out this loan scheme, you need to know everything about the factors that affect the interest rates, process, and schemes, as well as the advantages and drawbacks.
Understanding Loan Against Property
LAP is a secured loan taken against an individual’s property. It is a loan offered by banks or non-banking financial companies (NBFCs). This loan is generally taken out for large expenses such as home renovations, business expansions, or investments. It is a popular form of mortgage loan available in India.
LAP is a great option for people who require a large amount of money but need more assets to pledge as collateral. It can also benefit those looking for financial stability who want to consolidate their debts into one loan.
However, it is important to remember that if the borrower cannot repay the loan, the lender can take possession of the property and auction it to recover the loan amount. Therefore, it is important to borrow only what is required and make sure that the borrower can repay the loan as per the terms and conditions.
Features and Benefits of Loan Against Property
Low-interest Rates
Under LAP, lenders can secure the property collateral. The risk is much lower for them. It allows them to offer lower interest rates, making it an attractive option for borrowers.
Flexible Repayment Options
Most lenders offer flexible repayment options, allowing borrowers to choose the most suitable repayment option for their needs. It could include shorter or longer repayment periods, fixed or variable interest rates, and more.
Tax Benefits
Interest payments on a LAP can be deducted from your taxable income. It can reduce your tax liability and provide additional savings.
High Loan Amounts
Loan amounts are typically higher with a LAP than with other types of loans. Since LAPs are secured loans, they tend to have higher loan amounts than unsecured loans. They have more confidence in providing the loan. The LAP can benefit those looking to borrow a large sum of money.
Flexible End-use
LAP can be used for multiple purposes, such as home renovation, debt consolidation, business expansion, and more. This makes it a great option to fund a variety of needs.
The costs to be incurred
Besides the interest rate which shall be applicable on the loan, the lender may also charge the applicant a processing fee & a mortgage stamp duty. The process of the loan disbursement
Once the loan against property is sanctioned after all the legal formalities, the loan is disbursed. You may receive your loan in a single payment or 2-3 installments, depending on the size of your loan.
The Repayment Process
Usually, the general repayment period for a loan against property is 10-15 years. In certain cases, there may also be certain prepayment charges. This depends upon the kind of interest rate chosen.
Process for a loan transfer
During the repayment period, if the customer finds another lender who is offering better loan terms, the person has the option of transferring the loan from an existing lender to the new one. There might be some additional charges like prepayment charges involved in this process. Calculating all the costs involved in the loan transfer is vital before it’s done. This is because, with all the prepayment charges and loan processing fees on the new loan, one may not have any real savings.
To conclude, a loan against property is surely the most preferred option to choose when one needs a large quantum of funds quickly. Of course one needs to ensure that the loan is paid back on time, failing which, the lender has the right to take possession of the mortgaged property.
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Factors That Affect Interest Rates
Interest rates are important when taking out a loan, particularly a LAP. The interest rate you receive on your loan will determine the overall cost and how much you will end up paying back throughout the loan.
Credit Score
Lenders will use your credit score to assess your creditworthiness and decide whether or not to offer you a loan.
A low credit score suggests that you are a high-risk borrower and may have difficulty repaying the loan. As a result, lenders may charge a higher interest rate on a LAP to offset the risk of default. It may also have a stricter approval criterion.
Profile of the Applicant
The applicant’s profile may include income, age, and previous loans.
Your income is another important factor in determining your interest rate. The higher your income, the more likely you will be able to afford the loan and make timely payments. As a result, lenders are more likely to offer you a lower interest rate.
The borrower’s age is important, as lenders generally prefer older borrowers with established credit histories. For younger borrowers, lenders may consider their loan application as more of a risk. It is because younger borrowers often have shorter credit histories and, as a result, may have lower credit scores than older people.
Lenders also consider your existing loan history. The lender will likely offer you a low-interest rate if you have a good repayment record. It is because you have demonstrated your financial responsibility in the past. If you have multiple existing loans, the lender will be reluctant to provide you with a higher loan amount as the risk of defaulting on the loan is high.
Property Value, Documentation and Insurance
The appraised value of your property will also play a role in determining your interest rate. The higher the appraised value of your property, the more likely you will receive a lower interest rate.
The documents that you have provided serve as evidence of the ownership and value of the property being used as collateral. The more information provided to the lender, the more accurate the assessment of the loan’s risk can be.
Adequate insurance coverage is important to ensure the safety of the lender’s investment. The lender must be sure the collateral property is protected in case of any eventuality. The lender needs to be satisfied with the property’s insurance. In case of any damage, the insurance should be able to cover the cost of repair or replacement.
Loan Amount and Tenure
The amount you borrow will also play a role in determining your interest rate. It affects the repayment capacity of the borrower. The higher the loan amount, the higher the monthly installments, which might be difficult for the borrower to pay. In such cases, the lender will charge a higher interest rate to compensate for the risk associated with the loan.
The longer the loan tenure, the higher the risk to the lender. Thus, the higher the interest rate. It is because, over a more extended period, the risk of default increases, and lenders need to compensate for this risk by charging a higher interest rate.
Applying for Loan Against Property
Understanding the eligibility criteria, documentary requirements, and the process is important to help you understand the loan details before signing the LAP agreement.
Eligibility
To be eligible for a Loan Against Property, you must:
- Have the collateral property in India
- Must be 25 to 65 years of age
- Must have a steady income from a job or a business with a minimum of Rs 25,000 a month
- Secure the complete and legal property documents
Once you have confirmed that you meet the eligibility criteria, you can apply for a LAP. The lender will assess your creditworthiness and the property’s market value before approving or rejecting your application.
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Documents Needed
The documentary requirements for a LAP application are essential to ensure that the loan is taken out per the lender’s regulations and that the lender and borrower are both protected. Here are the required documents when you apply for a LAP:
- Proof of Identity (passport, driver’s license, and other government-issued IDs)
- Proof of Address (recent utility bill, property deed, or rental agreement for commercial property)
- Property Documents (deed of sale, no objection certificate, and property tax receipts)
- Proof of Income (salary slips for the past three months, bank statements, and income tax returns)
Application Process
The first step in the LAP application process is determining eligibility. Generally, lenders will require you to have a steady source of income, a good credit score, and a valid property title. You may also need to provide additional documents such as bank statements, financial records, and proof of income.
Once you have determined that you are eligible, you must choose a lender. Different lenders may offer different terms, so it is important to compare offers and choose the one that best suits your needs.
You will need to complete the application form provided by the lender. This form contains all the necessary information about you and your loan request.
The lender will decide whether or not to approve your loan based on your eligibility, documents, and provided information. If your loan is approved, the lender will send you a loan agreement outlining the loan’s terms and conditions.
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Salary Loan
Personal Loan For Salaried Employees
Everyone needs funds for major expenses from time to time. When a financial emergency strikes, dealing with it can be difficult, especially if you are a salaried employee with a fixed monthly income. The primary reason is that you have already set aside a portion of your earnings for necessities such as household expenses, children’s education fees, insurance premiums, etc. Hence, there is not much leeway to pay a considerable sum upfront.
How Salaried Employees Can Get a Personal Loan in India
A personal loan is a boon when you are going through a financial emergency. It is easily accessible as it is an ideal option to meet your short-term funding requirements such as marriage expenses, travel, online courses, medical exigencies, etc. Getting a bit of extra credit through a personal loan requirement can become as much of a necessity for a salaried employee as well. So, if you are a salaried employee looking for a personal loan in India, here are a few things you need to know.
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Personal loan eligibility criteria for salaried employees:
The eligibility criteria for personal loans vary from one bank to another. For salaried employees, it is easy to avail a loan of up to Rs 25 lakh starting at the rate of 10.75% p.a. from ICICI Bank, as meeting personal loan eligibility isn’t much of a complication. However, there are some general rules that are usually followed, and they are:
Nationality- The foremost criteria for applying for a personal loan is you need to be a resident of India
Age limit – Usually, the minimum age limit is 23 years, and the maximum age is 58 years for salaried individuals
Employment status – To apply for a personal loan, you need to be employed for a minimum of two years
Minimum salary – Since you do not need any collateral for a personal loan, banks will take into account your disposable income. They decide on the minimum salary requirement based on factors like the borrower’s credit score, nature of employment, previous relationship with the bank and so on
Credit score – Your credit score is a major factor in determining your eligibility for a loan. But there is no need to lose hope if your credit score is not good enough. The fact that you are a salaried employee with a stable job can also work in your favour in this regard.
Documents required for Salaried Employees to apply for a personal loan
Proof of Identity: PAN Card, Voter’s ID, Passport, or Driving Licence
Proof of Residence: Utility bill, Passport or Leave and Licence agreement
Latest 3 months’ Salary Slips
Latest 3 months Bank Statement (where salary/income is credited)
2 Passport size photographs.
To know more about the criteria and guidelines, get in touch with GROUND ZERO. Our team will help you get a personal loan at a highly affordable interest rate. Don’t let financial worries trouble you anymore!
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Gold Loan
What Is Gold Loan ? How It Works, Gold Loan Interest Rate
One of the world’s biggest users of gold is India. According to the World Gold Council (WGC), India’s annual demand for gold surged by 804% between 1987 and 2016. It can be used as collateral for gold loans, which are frequently used to get funds for both long- and short-term purposes. The gold loan is actually one of the simplest and quickest ways to get money when you need it.
The gold loan may be your best financial option, even if you have lots of unused gold in your safe but a low credit score. With the growing popularity of gold loan every year, it is necessary to know not only what a gold loan is but also how it operates, gold loan interest rates, and other associated data.
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Gold Loan
The meaning of a gold loan is a secured loan taken by borrowers seeking to meet their immediate or long-term cash demands against gold. Lenders typically approve you for a loan in an amount that corresponds to a particular portion of the gold’s value. You can receive your gold items back after paying them back in monthly installments. In this case, the borrower guarantees their gold jewellery as security. According to the Reserve Bank of India, the amount of the loan allowed may not exceed 90% of the gold’s current market value. The gold that can be pledged ranges in carat weight from 22 to 24.
Thus, it’s a terrific option to meet your urgent financial demand, whether it’s for a wedding, a family trip, or your child’s school. In addition, many commercial and nationalised banks as well as NBFCs provide gold loans at low-interest rates.
How does a gold loan work?
The entire gold loan process is very comparable to other secured loans. In this scenario, you deliver your gold items and the necessary paperwork to a lender. The lender assesses the gold items and examines the submitted paperwork. The lender approves the loan amount based on the evaluations. According to the loan agreement, you repay the principal and interest payments and receive the returned gold items.
What is the interest rate on which lenders give the gold loan?
Since a loan given against gold is secured, it has a lower interest rate. The interest rates charged on these loans vary from one lender to another and rely on a number of variables, including the term of the loan, its size, etc. Also, it depends on where you are borrowing the gold: from a bank or an NBFC. In general, banks charge lower interest rates on loans against gold compared to NBFCs. Hence, if you intend to apply for a gold loan, resist the need to take the first offer you are given. Make your decision after comparing gold loan offers from at least two to three lending institutions.
How to get a gold loan?
You must first have your gold jewellery, coins, biscuits, or other tangible forms of gold on hand in order to apply for a gold mortgage loan. Choose a bank or NBFC that provides loans against gold products in India after that. The interest rate might vary from 7 to 29% annually, depending on your creditworthiness and CIBIL score.
The lender (a bank or an NBFC) will examine your gold at home or in a physical branch of the business to ensure its purity. Identity and address evidence are two forms of paperwork needed for a gold mortgage loan. A PAN card, Aadhar card, current passport, or voter ID card are examples of acceptable government-issued documents.
You are qualified to collect the money once the personal verification and the gold have both cleared. But, if the loan is not paid back, the gold that was pledged might not be recovered. If the lender offers online loan applications, you can do so as well.
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What is the gold loan tenure?
One lending institution may have a different prepayment policy or tenure from than another. The typical range is 3 to 12 months. Some lenders may even let you renew it so you can extend the tenure, depending on the circumstances. Be sure you repay the loan amount on time because the gold loan has a shorter term than other sorts of loans. Defaulting on gold could result in the permanent loss of your gold possessions.
Benefits of Gold Loan
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Quick and Easy Access to Funds
One of the most significant advantages of a gold loan is its quick processing. Financial emergencies often require immediate access to funds, and gold loans offer just that. The simple process involves minimal paperwork, ensuring borrowers can get the required funds swiftly. This speed can be crucial during medical emergencies, education expenses, or business needs.
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No Credit Checks and Flexible Eligibility
Gold loans do not require a credit check, unlike other types of loans. This makes them accessible to individuals with poor credit histories or those without a stable income. You are eligible for a gold loan as long as you own gold. This flexibility in eligibility widens the scope of people who can benefit from this financial option.
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Lower Interest Rates
Gold loans generally have lower interest rates than unsecured loans like personal loans or credit cards. This is because the gold you pledge serves as collateral, reducing the risk for the lender. Lower interest rates mean reduced financial burden on the borrower, making it a cost-effective borrowing option.
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High Loan Amounts Based on Gold Value
The loan amount you receive is directly proportional to the value of the gold you pledge. This means you can secure substantial amounts, making it suitable for significant expenses like business investments, education abroad, or debt consolidation. The value of gold is determined by its purity and current market rates, ensuring a fair evaluation.
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No Prepayment Penalties and Versatile Usage
Gold loans offer the flexibility of repaying the loan amount anytime during the tenure without incurring prepayment penalties. Additionally, there are no restrictions on how you use the loan amount. Whether for a wedding, home renovation, or any other purpose, the funds can be utilized according to your needs.
Eligibility Criteria for Gold Loan
- Individuals between 18 and 75 years can apply for a gold loan.
- The applicant must own gold jewelry, coins, or bars to pledge as collateral for the loan.
- The gold items being pledged should meet the lender’s specified purity criteria, often ranging from 18 to 24 carats.
- The sanctioned loan amount depends on the pledged gold’s weight and current market value.
- Applicants must provide government-issued identification documents such as an Aadhar card, PAN card, passport, or voter ID.
- Lenders require proof of residence, which can be established through utility bills, ration cards, or driver’s licenses.
- While some lenders do not require proof of income, a stable income can enhance the borrower’s credibility and loan approval chances.
- Individuals with a good repayment history of previous loans are often considered favorably.
Documents Required for Gold Loan
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Proof of Identity (Any One):
Aadhar Card, PAN Card, Passport, Voter ID, Driving License.
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Proof of Address (Any One):
Aadhar Card, Passport, Voter ID, Utility Bills (electricity, water, gas), Ration Card, Driving License.
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Passport-size Photographs:
Recent passport-sized photographs of the applicant.
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Proof of Ownership:
Invoice or receipt of the pledged gold item (if available).
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Form of Gold:
Details about the form of gold being pledged (jewelry, coins, bars) and its purity level (in carats).
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Duly Signed Application Form:
A filled and signed application form provided by the lending institution.
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Income Proof (Optional):
Some lenders may require income proof, although gold loans are often granted without this requirement.
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Borrower’s Signature Proof:
Signatures on the application form should match those on the identification documents.
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Witness Letter:
Sometimes, a witness letter from a known person in the locality must confirm the applicant’s identity and address.
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Bank Account Details:
Some lenders may ask for the borrower’s bank account details for loan disbursal and repayment purposes.
To know more about the criteria and guidelines, get in touch with GROUND ZERO. Our team will help you get a personal loan at a highly affordable interest rate. Don’t let financial worries trouble you anymore!
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