Among many other benefits of a loan against property, the ease of approval is one of the prominent benefits. Availing a loan against property is much easier than availing an unsecured personal loan. The only thing which one needs to take care of is that the property title is free from any kind of mortgage litigations.

When opting for a loan against property, you pledge any property you own as collateral. The lender then sanctions a sum ranging between 75% and 90% of the current market value of the property. Often, this ratio depends on whether the property is a residential or commercial, and whether it is occupied, vacant or rented. Certain lenders such as Bajaj Finserv offer up to Rs.3.5 crore as the loan amount, and this sizable sum can be used to finance personal or business expenditures. This amount is higher than the amount you can access when you opt for an unsecured loan such as a personal loan.

Since a loan against property is a secured borrowing option, a lender’s risk is reduced since any losses may be recovered by making a legal claim on your property. This security is the main reason why lenders offer a nominal interest rate on this type of loan. Further, this low rate greatly aids your repayment efforts as it reduces your interest outgo, thereby decreasing the total cost of the loan. You cannot enjoy the same benefit when you opt for a collateral-free loans as lenders usually charge a higher interest to reduce their risk.