Loans Against Property in Delhi NCR

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If you are facing shortage of capital for starting your business, you can secure business loan against your property. You can access this loan from various private and public sector banks across the country. Besides, there are many private lenders, whom you can approach for a Loan Against Property (LAP). Make sure that the lending institution you approach maintains complete transparency in terms of operations. Loan against property can be classified into two categories.

  • Lease Rental Discounting
  • Loan against Overdraft Facility

A) Lease Rental Discounting

You can make the most out of your rented premises to originate funds for further expansion of your business or to buy another commercial property. Loan against rentals or rental discounting (commonly used term by banks and financial institutions) mean extending lending facilities to you against your rentals received. You can avail up to 90% of your net rent receivables against your commercial/industrial property (CLU or Change of Land Use is a must) / residential property at rates starting at as low as 10.99% per annum. Ranging from 40 lakh to 400 crore, this type of loan is restricted to max 60% of the present market value.

  • Income Documents
    • The borrower must hold a good rating (not applicable for a loan below 3 crores).
    • Rentals should be regular credited in account supported by 12 months bank statement.
    • BIn addition to these, there is a clause of tripartite agreement with bank, tenant and the lessee (generally over looked if the loan amount is >10 crore).
    • Leave and license agreement.
    • KYC documents.
    • Token cheque generally varies from INR 5,000/- to 10,000/- depending on the institution. The token cheque is non-refundable.

B) Loan/Overdraft Facility

For business expansion, you can secure funds against your residential or commercial or industrial properties. The loan can be structured on basis of business income, rentals and type of business except businesses that are speculative in nature such as that of property brokers.
The loan has been classified into two various segments:

  • Term Loan
    (Simplified term loan repayable in fixed tenure).
  • Overdraft/drop line overdraft facility is an extension to the typical term loan and the beauty of the product is that you pay interest on the part you use and yet your principal will get lowered or zeroed in the coming years.

Documentation and property in question document remain same. There are presently 38 banks and Non-Banking Financial Company's (NBFC's) aggressively funding this segment with ROI (Return on Investment) starting from 11% to 15% depending on the profile of the client. The loan amount can be availed up to a maximum of 70% on residential and 60% on commercial or industrial property. To secure this type of loan, you need to submit the following documents:

Legal Documents

You need to submit all the legal documents right from the origination or allotment of property to title deeds through GPA (General Power of Attorney) or sale deed.

Technical Documents

in addition to the above mentioned property document, you'll need the following for valuation purposes:

Sanction Plan:

A valid sanction map is required from the concerned authority, if applicable within the clause given in title documents.However, some institutions work with or without sanction map also.

Have specific financing needs not listed above?

Have specific financing needs not listed above?

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