In India, you get as many as 6 types of mortgages. Under the Section 58a of Transfer of Property Act of 1882, definition of a mortgage stands as an immovable property transfer of ownership to secure the payment of funds against it, creating a mortgage loan line of credit.
Without further ado, here are the various types of mortgages you can get in India.
In this mortgage type, you keep an immovable property as a house as security in order to get a loan. The bank or lender retains all rights to sell off the property if you can’t repay.
In this type of mortgage loan, the lender is transferred the immovable property without creating a personal liability on you, the borrower.
In this type, the borrower has to shoulder a personal liability. The mortgaged property is transferred on the condition that you can recover the property after successful repayment.
In this type, the borrower sells off the property with the legal terms that the sale becomes effective if he or she cannot repay the loan. However, if the repayment is successful, the sale becomes void.
In this type, you deposit the property’s title deed as security and mortgage against the loan.
Any mortgage that does not come within the divisions above fall under Anomalous mortgage.
Mortgage loans generally include all of the following:
Loan against residential property
Loan against commercial property
Land purchase loan
Lease rental discounting
Loan to buy another commercial property
An LAP or Loan against Property is a type of secured loan which is sanctioned only after you mortgage your immovable asset in return of the loan. This security can be a property, a house, a land and even a commercial property. The lender retains this collateral till the loan is repaid.
Loan against property is a good alternative against unsecured loans where interest rates are much higher. However, LAP tenure and loan amount are higher in comparison. You can LAPs for buying raw machinery, raw materials, equipment, and etc. You can use it for personal reasons and for business purposes.
Each year, the cost of education is rising alarmingly. As such, parents have to take heavier loans to meet their children’s education needs. After all, your child can get the best education experience from the best institutes.
How to apply for education loans?
Understand mortgage loan
Keep all essential documents at hand
If you are having problems getting normal education loans, you can now get education loans against property.
Your credit score is a 3 digit number ranging from 300 to 900 reflecting your credit worthiness. Based on this score, lenders decide whether or not to give you a loan. The minimum credit score you need to get a Loan against property is 750.