A loan against property, also often referred to as a property loan, is a type of secured loan under which borrowers pledge real estate -- commercial or residential -- as collateral or security for the loan. The loan money comes with zero end-use restrictions. In simple words, borrowers can use the loan money to meet any kind of personal or professional emergency.
Under a loan against property, borrowers can continue to use the property as they like or were using it before they pledged it as security. The lender, on the other hand, can sell the property for recovery of the loan money in case the borrower is unable to honour their commitment regarding repayment.
Lenders decide the loan amount to be sanctioned under a loan against property based on various factors, the most important of which is the resale value of the property. In the case of loans against residential properties, lenders sanction up to 60% to 70% of a property's value as a loan. In the case of loans against commercial properties, this value comes down to 50% to 60%.
Borrowers must know the actual value of their property before they pledge it as collateral. This is crucial to ensure they are getting the right value for it. An online land calculator can prove to be very helpful in this case.
An online land calculator is a useful tool that allows loans against property borrowers to convert one unit of land measurement into another. In India, in various parts of the country, the land is still measured in local units. When you apply for a loan against property, your lender will ask you to quote the area of the property in units that the lender understands and that are a part of the International land measurement unit system. An online land calculator will allow you to make this conversion. This tool is also quite easy to use -- all you have to do is enter the area of land in units that you understand and know and then select the unit to which you wish to convert this area. The online land calculator will show you the area of your property in units that your lender understands in just a few seconds.
Here are a few reasons you must consider using an online land calculator before availing of a loan against property.
- The online land calculator allows borrowers and lenders to assess the right value of the property being pledged as collateral. This helps both parties mutually decide the right loan amount that can be sanctioned against the collateral.
- The online land calculator has details of all the local and international units. It is impossible to keep a track of formulas that allow one to convert one unit into another. Thus, manual calculations in this case are nearly impossible. The online land calculator is accurate and quick and it makes the life of everyone involved much easier.
- The online land calculator has quite a simple user interface. Thus, almost anyone with a basic understanding of how the internet works can use it. Further, the calculator helps borrowers save a lot of time and energy, which they can use for other purposes.
So, if you are planning to avail yourself of a loan against property, use an online land calculator to make your life simpler.
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