Understanding Mortgage Loans

Mortgage Loans, also known as Loans Against Property, are the type of credit where you can avail of funds against a property you own as a collateral. Apart from a sizeable loan amount, you can get additional advantages such as extended repayment tenor, competitive interest rates, prepayment and foreclosure charges, and more.

When opting for a mortgage loan, the ownership of your property is transferred to the creditor. Once the credit is repaid, the lenders transfer the mortgage ownership back to you. These Loans Against Property serve as handy options for big-ticket expenses such as refurbishing your home, expanding your business, or debt consolidation.

A mortgage loan is a type of credit where you can avail of funds for collateralising your property. You can pledge any residential or commercial property and avail of a mortgage loan or Loan Against Property. Your credit score, income, and employment are a few factors that affect the loan amount to be sanctioned. Make sure to check the important terms and conditions before beginning the application process.

The mortgage loan sanction is repaid in the form of EMIs (equated monthly instalments) that have two components. The amount you repay at the end of closing your loan comprises of the following: 

1. The Principal Amount: This amount is your original loan ask and what the lender disburses into your account.
2. The Loan Interest: This amount is the cost of borrowing the principal amount, usually charged per the compound interest format.

However, you also have the flexibility to repay your loan before the end of the tenor or even foreclose your credit.

Also Read: Floating Interest Rate on a Loan Against Property

Step 1: Fill out the Application Form

To begin the mortgage loan process click on the 'Apply Now' button to move to the application form page. There, you will need to enter your personal details, employment details, income information, loan requirements, and so on.

Step 2: Await Loan Processing

After you have submitted the loan application form, the lender will review your eligibility for the mortgage loan. They may offer you terms based on your eligibility, or they might suggest adding a financial co-applicant to increase your eligibility.

Step 3: Document Submission

Once the initial processing is complete, you will need to submit the required documents***. These include your KYC documents, property documents and income documents. Note that PAN Card or Form 60 are mandatory documents.

**Additional documents may be required at the time of loan processing.

Step 4: Loan Verification

Once you have submitted the documents, the lender will begin the verification process, which includes technical and legal checks. A property evaluation will be conducted to ensure the authenticity of the property's title. Based on these assessments, the lender will confirm loan approval.

At the final stage, the lender will hand over a credit sanction letter to the borrower, approving their credit. These also contain the approved terms and conditions based on which you will have to repay the credit.

The factors you should evaluate before applying for a mortgage loan are:

• Property Value: The approved amount is determined by the metric value of the property you want to mortgage. Other considerations also include the condition of the property.
• Interest rate: Availing of a mortgage loan with a competitive interest rate provides reasonable monthly payments as well as overall cost savings.
• Fees and charges: There are certain fees and charges that you need to take into account before availing of a mortgage loan.
• Long Tenor: Mortgage loans typically come with long repayment tenors of up to 17 years.
• Eligibility: The loan criteria vary depending on your type of employment, income, and age, among other variables. Always double-check the eligibility criteria before applying for loan.

Listed below are the popular types of mortgage loans that are available to interested borrowers in India:

1. Home Loan:

   A housing loan is a secured loan through which you can borrow funds to purchase a property from a developer, individual, or an entity. You may even receive a sanction to facilitate the repurchase of an old property. For new constructions, loans are offered for ready for possession properties and even ones that are under construction.

2. Loan Against Commercial Property:

   A Loan Against Commercial Property is a secured loan that allows you to mortgage your commercial property for a sizeable amount. The sanction can be used to address housing or business-related requirements or debt consolidation.

3. Loan Against Residential Property:

   Similarly, a Loan Against Residential Property allows you to mortgage your residential property for a sizeable loan sanction with end-use flexibility. You can use the borrowed amount for home renovation, business expansion, or debt consolidation.

4. Lease Rental Discounting:

   Lease Rental Discounting is a credit tool sanctioned against income-producing commercial property. 

Also Read: Types of Properties for Mortgage Loan

​​​Following are some of the features and benefits of a mortgage loan:

​Reasonable Rate of Interest :

​mortgage loan​ interest rates are​ typically competitive and reasonable. Lenders consider factors such as the borrower's credit score, income, and property value while determining the interest rate. Securing a mortgage loan with a favourable interest rate ensures manageable monthly repayments and overall cost savings.​​​

Loan Tenor:

Mortgage loans usually come with a longer tenor of up to 17 years. So, you have the flexibility of selecting the duration as per your repayment capacity.

High-Value Loan Amount​:

​Mortgage loans usually offer a loan of Rs.5 Crore*, or even more based on property value and borrower profile. This can help borrowers meet their unexpected big-ticket expenses.

Easy Balance Transfer:

​Mortgage loans often allow you to transfer your Loan Against Property balance to another lender for better terms and interest rates.

The following are the easy-to-meet eligibility criteria for salaried and self-employed applicants who wish to apply for a mortgage loan:

Salaried Applicants

• National: Indian citizens (resident only)
• Residential Location: Areas where we operate
• Age: Must be between 23 and 60 years**
• Employment: Employed in a public or private limited company or an MNC

Self-employed Applicants

• National: Indian residents only
• Residential Location: Areas where we operate
• Age: Must be between 23 and 70 years**
• Employment: Must have a steady income source along with the necessary business vintage

**The upper age limit is considered as age at the time of loan maturity. Additionally, the upper age limit for applicants is subject to change, depending on the property profile.

*Terms and conditions apply.