Organising a wedding involves meticulous planning and the costs can be significant enough to entirely deplete one’s savings. Fortunately, there are various credit options available to fund a wedding, such as personal loans and loans against property.
Though personal loans may appear to be more convenient, their interest rates can be quite high and repayment tenures too short. Hence, it is best that individuals avail of a loan against property for wedding.
Benefits of availing a loan against property for wedding
Here are a few key benefits of opting for a loan against property:
- Higher loan quantum
By pledging property as collateral, loan applicants can potentially secure a loan amounting to roughly 75% of their property’s value.
For instance, if a property has a value of Rs. 25 lakh, then the applicant may be eligible for a loan quantum of up to Rs. 18.75 lakh. This option can be advantageous for borrowers who require a substantial loan.
- Easy eligibility and swift approvals
Loan against property eligibility criteria include the applicant’s income, credit history, and age, which are generally quite easy to meet. Similarly, the approval process is also fast with minimal requisites. The documents include identity, address, income, and property proof.
- Tax benefits
Here are loan against property tax benefits:
- Section 24(B)
Section 24(B) applies to salaried candidates who use the loan amount to purchase a new residential house. Such individuals can claim tax exemptions of up to Rs. 2 lakh.
- Section 37(1)
Candidates can benefit from tax breaks under Section 37(1) by using the loan amount for business expenses. Company costs, such as interest fees, processing, and paperwork have tax benefits.
- Longer repayment tenure
With a loan against property for wedding, one can obtain a higher loan amount with a more extended repayment period, making it easier to manage. As a result, this option provides a feasible way to finance a wedding without putting too much strain on one’s finances.
- Lower rate of interest
Loan against property interest rates are typically lower than other forms of credit. This is due to the fact that a loan against property is a secured credit option.
Further, applicants can use an online loan against property EMI calculator to better schedule their repayment tenures and plan their finances accordingly.
- No foreclosure fees
Borrowers who choose variable interest rates can make prepayments to settle the loan before the term finishes. If borrowers decide to do so, there are no penalty costs or extra prepayment or foreclosure expenses.
How easy is it to avail of a loan against property?
Prior to offering a LAP, lenders have a set of processes to follow. They conduct checks and verifications to ascertain the value, ownership, as well as the property’s residual life. In addition to that, lenders also assess borrowers’ repayment capability before granting approval for the loan.
The process may take a month or more to complete, so it is advisable to start the loan application process early. Moreover, lenders levy a processing charge of approximately 0.5% to 1% before approving a LAP.
Many lending institutions extend pre-approved offers on financial products, including but not limited to home loans, loans against property, and other types of loans. This streamlined lending process helps save time for borrowers. To easily check their pre-approved loan offers, applicants can provide the required information.
Therefore, it is essential to carefully consider all aforementioned aspects before an individual applies for a loan against property for wedding expenses. Further, it is advisable to avail of a loan quantum that is easily manageable and covers all wedding costs.
