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How Can I Utilise A Loan Against Property?

Published on Dec 31, 2019Updated on Jan 12, 2024

How Can I Utilise A Loan Against Property?

Loans against property are a form of unsecured loan that has gained immense popularity. They are essentially multi-purpose loans that individuals can secure from banks and lending institutions by using a currently owned property as collateral. Depending on the property, you can obtain up to 60-70% of the market value of the property. You can put up both residential and commercial properties as collateral.

It is important to note, however, that when your property is mortgaged to the lending institution, you can still continue using it for any residential or commercial purposes. The property loan interest rates are much lower than in the case of other forms of borrowing, hence making Loan against property one of the best options to use when you need a large sum at the lowest possible interest rates.

Although there are almost no restrictions to the way you can spend the funds you have obtained from a loan against property, here are some ways you can utilise this product to help achieve your financial dreams and goals.

#1. Finance your child’s higher education

You can use the funds you have availed from a mortgage loan against property to help finance your child’s education. If financing has been a deterrent in your child’s decision to pursue higher education, you no longer have to worry about the same. You can have the funds disbursed to your bank immediately for up to 70%* of the market value of your property for residential premises and up to 60%* of the market value of your property for commercial premises. You can thus, use loans against property to finance your child’s education and pay back the amount in EMIs at a much lower interest rate than an education loan. Also, since there isn’t any restriction on how you use the funds, your child will have the freedom to pursue any course from any university of his or her choice.

#2. Finance the expansion of your businesses

Have you always considered wanting to start a new business? Or perhaps expand your existing one? Businesses are popping up everywhere in the country and everyone in the market is taking advantage of the availability of skilled labour, technology and other resources to make their business the preferred choice for customers. If you are among this group of highly motivated individuals and need financing, you can use your currently existing store or office to obtain a loan against property. Yes, you read that right! If you avail a loan against your commercial or residential property, this does not mean you have to give up the use of the pledged collateral or asset. In fact, you can continue using the property you have put up as collateral for any residential or commercial use.

#3. Pay for a medical or other emergencies

A medical emergency is a tough situation, particularly when it involves a loved family member. At such times, one is often motivated to get the best possible treatment options in terms of choice of hospitals and doctors, but may feel restricted due to lack of coverage for the desired medical service or provider from insurance. Again, a mortgage loan against property could be your best way out, particularly if the sum you need is large. Unlike other loans which are unsecured and are charged at a higher rate of interest, loan against property interest rates are very favourable for the borrower. This is because loans against property are secured loans, and have security unlike other emergent loans available on the market.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

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