Nothing beats a loan against property in order to cover large expenses. The substantial loan amount, low-interest rate, and longer repayment period make this loan the borrower’s first choice. Here is when it is worthwhile to apply for this loan.
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Medical expenses
It is impossible to deny that medical inflation has the potential to deplete one’s hard-earned savings. If you do not plan ahead of time for medical uncertainty, the situation will become extremely difficult for you during a crisis. But how will you budget for such costs? If you are answering health insurance, you may be unaware that most medical insurance policies do not cover severe illnesses, especially if the policyholder acquired them before purchasing the insurance. In such cases, a loan against property can be beneficial.
The fund value under such a loan is sufficient enough to cover hefty bills.
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Property purchase
This should come as no surprise. You can use the loan against property to buy any type of residential or commercial property. Assume you own a commercial property worth Rs 20 crores. You want to expand your business to a new location and want to buy a fully furnished two-storey office for Rs 10 crores. Do you think any other regular loans can assist in this case? Probably not.
However, before proceeding with a mortgage loan to purchase real estate property, use a loan against the property calculator.
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Start-up business
Do you know why, despite the government’s efforts, starting and establishing a new business is difficult? The reason for this is a lack of financial support. Start-ups do not receive business financing from lenders. It’s because new entrepreneurs are inexperienced and lack previous business financial records.
Since lenders are unable to gauge the risk associated with the business profile, acquiring funds is tough. But with a loan against property to your side, you don’t need to be concerned about setting up a new venture, provided that you own some real estate to your name. Use a loan against a property calculator to check how much EMI you can afford and how long you want to stretch your repayment tenure.
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Education expenses
If you have a child who wants to pursue MBBS, MBA, or B.Tech, start saving for their education fees as soon as possible. The reason for this is that education inflation is increasing at an unpredictable rate. The cost of studying medicine at a reputable college ranges between Rs 50 lakhs and Rs 80 lakhs. The same is true for an MBA. The top business schools in India charge between Rs 40 and 50 lakhs for an MBA.
Many people believe that they can get an education loan to help pay for their higher education costs. However, financial institutions do not provide this loan to all educational institutions. Only if your child’s college has a good placement record will they be approved for an education loan. Thus, your best alternative here is to apply for a loan against the property.
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Wedding expenses
Planning for a lavish wedding requires a significant sum of money. You need to spend on a host of things. Let’s split the wedding bills of an average Indian wedding to give you a better idea.
- Venue charges: Rs 20-25 lakh
- Decorators: Rs 5-10 lakh
- Caterers: Rs 10-15 lakh
- Lights and DJ: Rs 2 lakh
- Miscellaneous: Rs 3 lakh
When the cost of jewellery is factored in, the rates rise even further. However, these expenses can be easily managed with a loan against property.
To conclude
A loan against property can meet all of your financial needs. However, before applying for this loan, you should use a loan against a property calculator to determine your affordability.
