Investing in residential and commercial properties gives you the option of earning rent and increasing your capital investment with time. However, such investments require a substantial amount that you may not have at hand. While applying for a home loan may be your first instinct, going for a loan against property can prove to be a smarter way to invest in real estate.
Here’s what you should know about investing in property by availing a loan against property.
What is a Loan Against Property?
A loan against property is a secured debt that you can avail by pledging your existing property. Your loan amount is determined based on the market value of the collateral in question. As such, when you pledge a big property that you own in a strategic location, you can enjoy a high sanction amount, which you can then use to invest in other properties.
When applying for a loan against property, shop around for lenders who not only offer high loan amounts at affordable prices, but also convenient repayment options. Bajaj Finserv is one among such top lender who offers a Loan Against Property of up to Rs.1 crore for the salaried and Rs.3.5 crore for the self-employed. The simple loan against property eligibility criteria improves your chances of loan approval. The hassle-free loan application and minimal loan against property documents required also make processing quick and disbursal speedy, within just 72 hours.
Further, you can choose from convenient repayment tenor between 2 and 20 years to enjoy a stress-free loan servicing experience.Moreover, you can benefit from the loan against property features like the Flexi Hybrid facility. Here you can withdraw from the sanction as you go and pay interest only on such utilised amount to reduce your interest outgo. Also, you can manage your cash flow better by choosing to pay interest-only EMIs and repay the principal amount when the tenor ends.
Why Does it Make Sense to Avail a Loan Against Property for Investment Purposes?
- Since you already own a home, you can capitalise on its equity and invest in additional smaller properties. This way you can put your assets to best use without selling it and also strengthen your asset portfolio.
- You can rent out your smaller properties and enjoy regular income thereby.
- With the rental income that you earn, pay off the EMIs for the loan against property.
Finally, invest the rental and EMI differentials into lucrative options like SIPs to further increase your earnings and build your wealth.
