Types of Collateral Properties for a Loan Against Property

Understanding the Types of Collateral Properties

APPLY NOW

Banner-Dynamic-Scroll-CockpitMenu_LAP

Types of Collateral Properties for a Loan Against Property_WC

4 min 26 Dec 2024

Highlights:

Types of Properties that can be Pledged as a Collateral
Eligibility Criteria for a Collateral Property
Benefits of a Loan Against Property

When you apply for a secured loan, such as a Loan Against Property, you will have to pledge a property you own as collateral. Collateral property refers to the property pledged with the lender to secure a loan. In this article, we will delve into what collateral property means, its types, and how it can help you secure a loan.

Types of Properties that Can be Used as a Collateral

The types of properties accepted as a collateral may vary based on your lender. Typically, the following immovable collateral properties can be pledged to secure loans against them:

Residential Property:

You can mortgage any residential property, such as an apartment or a flat, you own as a collateral to avail of a Loan Against Property. These properties can either be self-occupied or rented out to a tenant.
Commercial Property:

Commercial property, including office spaces, shops, and retail outlets, are also widely accepted as collaterals when applying for a loan against property.
Industrial Property:

Warehouses or manufacturing units are some of the industrial assets that can be pledged as a collateral property.
Co-Owned Property:

Co-owned properties can also be considered as collateral properties to secure a loan, provided certain conditions are met. If the property is jointly owned by family members, it can serve as a security. However, all co-owners need to give their consent to mortgage the property.
Vacant Plot or Agricultural Land:

Non-agricultural vacant land or plots or agricultural land can be accepted as collateral properties, subject to the policies determined by the lender.

Eligibility Criteria for a Collateral Property

Before pledging a property as a collateral, it is essential to ensure that it meets the eligibility requirements of the lender. Some of the common criteria include:

Clear Title: The property must have a clear title, that is, it should be free from any legal disputes.
Ownership: You should be the legal owner of the property that you wish to mortgage. In the case of a co-owner, the consent of all co-owners is required.

Benefits of a Loan Against Property

Pledging a property as a collateral when availing of a Loan Against Property can offer several benefits such as:

Long Repayment Tenor:

You can benefit from a flexible repayment tenor of up to 17 years, which can ensure convenient EMIs.

Sizeable Loan Amount:

Based on the value of your property, you can be eligible to secure a high-value loan.

Competitive Interest Rate:

A secured loan, as compared to an unsecured loan, typically comes with a lower interest rate, ensuring that your cost of borrowing remains manageable.

Also Read: Things to Know Before Applying for Loan Against Property

Conclusion

Whether you are leveraging a residential property or commercial space, a Loan Against Property can be a convenient financial option to unlock the true potential of your property at favourable loan terms. Leverage your property to expand your business with a Loan Against Property from Bajaj Housing Finance.

Blog-Intro-Disclaimer

DISCLAIMER:

While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.