Even if you have already taken a loan, there might be times when you require additional funds. This sudden need can only be dealt with an overdraft facility. A credit against property overdraft is a service which is extended by financing firms that allow you to borrow short-term loans. It can even be used for a Loan Against Property for Debt Consolidation. Furthermore, it gives you an opportunity to get rid of all your debt in a single transaction. Apart from this, overdraft facilities also have a lot of benefits when it comes to taking a loan against property in India. For example, if you are a bank or financial institution employee, then your creditworthiness would be considered more. It means that you can quickly get a loan against the property for debt consolidation.
If you are a rookie and concerning loan against property features and overdrafts, then here is a list of everything that you should know.
The availability of this particular financing service is similar to any other loan against property eligibility. It focuses on the same criteria like stable monthly income, creditworthiness, debt history and the CIBIL score. As the approval standards are quite similar, it is very convenient to get a loan against property for debt consolidation. However, the amount limit might vary according to your relationship with the financing agency.
Every credit type is designed to target a different industry and the same stands corrected when it comes to loan against property overdrafts. In this case, the target section focuses on self-employed professionals and non-professional people. The Interest Rates on Loan Against Property are also quite low, in comparison to other loans. For instance, if you are a web developer seeking loan against property for debt consolidation, then you may very well be able to consider an overdraft against property facility provided by your bank.
Loan Against Property Tenor
Overdrafts are short-term financing options which is why the tenor of a loan against property for debt consolidation will also be less. The maximum period for which you can borrow and overdraft is of 24 months. This period is constant for everyone who is applying for the loan irrespective of their relationship with the organisation. So if you are looking for an extended time frame, then this might not be your option.
Loan Against Property Documents Required
Since, the overdraft amount is limited when it comes to taking a loan against property for debt consolidation, the paperwork needed is also less. Below is the list of all the documents that you would require in case of both self-employed professionals and non-professionals.
- The original application form along with a photograph.
- Proof of identity and residence.
- Educational qualification certificate for professionals and a business existence proof for non-professionals.
- Three years of income tax return statement or your business profile.
- Three years statement of the balance sheet.
- Original documents of the asset which you will mortgage to take a loan against property for debt consolidation.
Additional Read: Understanding the basics of a loan against property overdraft
While considering overdraft facility to take a loan against property for debt consolidation, you should always remember not to use the funds for any other purpose. This includes investing in the stock market. Utilizing the overdraft to deal in shares is considered a big negative by almost every financing agency in the country. Apart from this, you also need a co-applicant to be able to get a loan against property overdraft. It is a critical factor in the application process.