Introduction
India is the land of creativity. Take any big establishment around the world, and you would always find an Indian in some role or the other. It is because Indians are one of the most creative people you would find anywhere in the world. With the Indian economy growing at a faster pace than ever before, this is the best time to start your own business. However, a major problem that plagues almost all start-ups is the paucity of funds.
A loan against property is the best way to overcome the shortage of funds required to set your entrepreneurial dreams soaring. With COVID-19 still hogging the limelight, the government and RBI have made the loan against property eligibility easier and EMIs cheaper. Scroll down to know how a loan against property can help you to establish your business.
Why Should You Choose a Loan Against Property?
A loan against property, also known as mortgage loan, is one of the easiest loans you can avail as an entrepreneur. To be eligible to apply for a loan against property, you should be an owner or co-owner of a residential or commercial property. Since a mortgage loan requires a collateral guarantee, it is considered as a secured loan.
Being a secured loan, a loan against property offers you several benefits that other loans do not. For a start-up, time is as important as money. With a loan against property, you not only save money in the form of low-interest rates but also save time by getting the funds in your account within a short time.
The Best Features of a Loan Against Property
Other than easy eligibility and fast approval, a loan against property is best-suited for a start-up for the following reasons:
- High Repayment Tenor
The repayment tenure of a loan against property is higher than other loans you can avail as an entrepreneur. PNB Housing, for instance, offers you up to 20 years to repay the interest and principal. An enhanced tenure means lower EMIs, and lower EMIs mean more cash in hand that you may spend on business expansion.
- High Loan Amount
Unlike other loans, a loan against property sanctions funds of up to 60% of the property’s current market value. Hence, you can always have a better estimate of the amount you are eligible for and modify your business requirements accordingly.
- Easy Documentation
To avail a loan against property, you need to submit a few documents related to your age, identity, address, bank account, income tax, business profile, and property. Lenders also provide relaxation in the ‘own contribution’ clause when you apply for a mortgage loan.
- Low Rate of Interest
For a start-up, every rupee counts. The loan against property interest rates start from 9.80% and is one of the lowest rates you can get with any loan. The attractive interest rate makes it a popular loan for entrepreneurs.
- Convenient Loan Options
You may avail a loan against property in two ways – term loan and overdraft. If you opt for the term loan, you will get the entire loan amount in your bank account as soon as it gets approved. An overdraft, on the other hand, allows you to withdraw the loan amount in part, as and when you require it.
Conclusion
For a start-up, easy access to funds is as important as cheap EMIs. A loan against property is a no-frills loan that allows you to take care of your business needs without worrying about the availability of funds.
