By Nick H 
Loan against property could be the answer to many of your needs when it comes to money. A loan against property is a loan wherein the borrower pledges his or her property as security for the repayment of a loan. This type of loans are most common in India, where people will borrow money from banks, the get loan on property to buy investment properties and make liquid investments which they pledge as collateral for their property.
Nowadays, with house prices going up every day, it’s a wise move to get into long term investment in real estate because its value will only increase over time.
Who can apply for this type of loan?
You can apply for this kind of loans for home finance if you are a citizen of India with a stable source of income. Moreover, you need to have a house which is accepted as collateral. Landlords and tenants are not allowed to use this loan, but owning an investment property is ok.
How much money do you need to pay back?
The amount payable on the principal and interest will be determined by your source and tenure payment data, secured against the property pledged as collateral.
What is the interest rate of this loan?
This type of loans will be repaid at a base rate which is fixed by the lender. The base rate varies depending on your source and tenure payment data, secured against the property pledged as collateral.
Is there a commission involved?
No commissions will be attached to this loan. However, you may need to pay administration and other charges which are determined by the lender. These may include: insurance premium, attorney’s fee, processing fee and so on. These are called non-recourse charges and do not form part of any payments made by you as principal or interest payment in this loan.
How much time do you have to pay back?
This loan will be repaid in monthly instalments spread over a fixed period of time. The lender may require you to pay a deposit on the property before the loan is approved and the rest of the money will be paid over the course of many years. Repayment may take up to 30 years, depending on how much you borrow and your tenure payment data. At this point, it is safe to mention that people repay their house loans at different rates depending on their incomes and tenure periods.
Where will the money come from?
You will source the money you need to pay back this loan from your source and tenure payment data, secured against the property pledged as collateral. The amount you borrow is calculated by taking your property’s value and multiplying it by ten years of monthly instalments. This means that if you take a ten year loan, you’ll pay ten times a year – i.e every month – for years after the time period of your loan.