One of the fastest-growing cities in India, Pune is the 8th most populated urban area in India with several multinational companies, educational institutions and businesses sprawled across the city. The city is also a hotbed for several manufacturing industries which seem to be expanding all the time.
In case you are one of those residents of Pune wishing to join the bandwagon of entrepreneurs, you might be wondering where and how to arrange for the funds to kick start your dream project. Well, if you happen to own a property in the city, things just might be a tad bit easier for you with most banks and NBFCs offering Loan Against Property in Pune.
What is Loan Against Property (LAP)?
Also known as mortgage loan, it is a loan given by a lender (in this case a bank or NBFC) by keeping your property as a collateral. And no, you don’t need to vacate your property!
Who can apply for a Loan Against Property in Pune?
The eligibility criteria for most banks are similar –
- Resident of India (ID proof)
- Regular source of income (salaried/ self employed)
- 18 to 65 years of age
- Property documents in the name of the borrower (in case of joint ownership, the co-owner must be a co-applicant)
- A fully constructed and insured property (residential/commercial)
- No existing loan taken against it (in such cases, you can apply for a top-up loan from your current lender)
How do you apply for LAP in Pune?
Choose a lender, visit their branch or website to fill up an application form. On evaluation of your documents and property, they will decide the market value of your property. You can be given up to 60-70% of the property value as loan. This can be anywhere between 5 lakhs to 10 crores depending on the value of your property.
How do you repay the loan?
Each bank will charge its own interest rate which usually varies between 9.7 to 15%. For e.g. in Pune, HDFC Bank charges 9.75-10.75% on residential properties worth up to 99.99 lakhs. ICICI (10.15%), SBI (10%) and PNB (10.25%) are some of the other popular banks you can choose from.
You can decide the tenure of EMIs (max. 15 years). Remember, the longer the tenure, lesser the EMI!
Some banks also offer the opportunity to choose between fixed and floating interest rates, with the latter being dependent on market fluctuations.
What can you use the money for?
A lot of young entrepreneurs choose a mortgage loan in Pune to start their business instead of a business loan owing to its lower interest rates.
As a business owner, you can use the money for several things such as business expansion, investing in a new venture, buying machinery, etc.
How do you decide on a lender?
Almost all banks in Pune offer LAP. Moreover, financial institutes like Indiabulls or Bajaj Finserv also provide mortgage loans at similar interest rates (approx. 10-12%).
You should choose according to your needs and ability to pay the EMI. You must also look into the additional charges levied (service charges, processing fee etc.) Just take a detailed look at the comparison charts offered by Apnapaisa and use the EMI calculator to decide the best lender for you.