The Loan Against Property Rates & Their Effects

The loan against property rates are fixed by the loan amount, credit ranking of the borrower and the equity of the pledged security. All these three reasons affect the interest rate directly.
The modification of 1991 marked the dawn of Indian financial system. Capped with professionalism, hi-tech IT applications and diversification, Indian financial and loan market has now at its highest altitude. The entry of overseas banks has supported the system to get better its services. Now, competition is at all time high in the Indian housing finance business. With the improved contest, the customer has a number of alternatives to select his housing finance company (HFC) to apply for a loan according to the need.
The loan against property is on the rise in the attractiveness chart as more and more Indians are nowadays taking these loans as the most cost effective solution for their needs. The banks have two prime concerns while providing a loan against home:-
1. Repayment capacity of the borrower credit risk involved in the loan deal.
2. Title of property(If it free from any legal hassles or not).
The borrower to whom the bank is lending should have the capacity to pay the loan amount back in the assigned time period. Repayment capacity is a major concern of the bank while lending funds to anyone. In case of salaried loan applicants, the borrower needs to have a cheque salary which can be verified by the bank. A track record of salary entries in a bank statement reflects consistency and genuineness of the income source of the borrower.

2 Comments

  1. Posted July 1, 2008 at 5:23 am | Permalink

    Rising interest rates and a falling demand may dent the realty market in India. However, the long-term prospects for the sector continue to be good, feels the industry. There are around 21 India-dedicated real estate funds that are raising money in the international market. In the next nine months, nearly $7 billion will be entering the country through various India-dedicated funds. While long-term players are looking at India, short-term players based in the US and Europe, such as the hedge funds and private equity players, are more interested in their local markets.For more view- realtydigest.blogspot.com

  2. Posted July 31, 2008 at 5:37 am | Permalink

    LOAN against property is not so good because rising loan rates are very high which is to be very liable for all the persons for the future prospects which is not be to strong as financialy.

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