Outlook Money
Loan against property is offered against a commercial or residential property, such as an office, plot, shop or a residential flat, which is used as security for borrowing from a bank or other financial service providers.
The biggest advantage of taking a loan against property is that the loan amount can be used for any purpose, such as business, education, or medical expenses.
The rate of interest on a loan against property is much lower than on other loans, starting at 9.65 per cent per annum.
The specialty of this loan is that the borrower gets the option to repay the loan over a longer period. Generally, approval is given to repay the loan over a period of 10-20 years.
One can get benefit under Section 37(1) of the Income-tax Act, 1961 on the interest and processing fees. Under Section 24(B) of the Income-tax Act, 1961, if the loan amount is used to buy a residential property, tax exemption up to Rs 2 lakh is available.
One can retain the ownership rights of the property in a loan against property. Additionally, one can continue to use the property, too.
Compiled by Syed Muskan
Read More