The most popular Secured Loan is undoubtedly a Mortgage Loan. Banks offer them to borrowers who pledge their real estate or property to get funds. Approximately 70% of the current property value is offered as the Loan amount.

Many types of Mortgage Loans are offered based on what appeals to people. Businesses or individuals pledge their property as collateral for security against the borrowed amount.

Types of Mortgage Loans in India

Before applying for Mortgage Loans, you must understand their types. You can apply for different Mortgage Loan types:

Loan Against Property

This Loan is offered for commercial and residential properties. Borrowers must mortgage their property to get funds from lenders. The original property documents must be deposited with them until the Loan is repaid fully. Repayment is done on an EMI basis. Borrowers can use the Loan amount for personal or professional needs.

Many lenders provide an option to calculate LAP EMI on their website for the convenience of the borrowers. They usually have a tenure of up to 15 years.

Commercial Purchase

Businesspeople and entrepreneurs popularly apply for Commercial Purchase Loans. They apply for them to buy commercial properties, like shops, office spaces, and commercial complexes. This Loan is apt for commercial purchases. Banks offer them at competitive interest rates, and the funds obtained are used only to buy commercial property.

Lease Rental Discounting

Leasing out residential or commercial property is a common practice. Mortgage Loans are obtained against leased properties, too. The monthly rent amount is converted into EMI, and the Loan amount depends on that. The amount depends on the tenure until the property is kept leased. The lenders who are offering the Loan refer to the lease agreement.

Second Mortgage Loans

If a borrower purchases a property by applying for a Loan today, they can apply for an additional one on the same property for personal needs. Based on their credit score and Loan repayment history, the bank provides the additional funds required. The borrower must start paying the EMI of the second Mortgage Loan along with the first one.

Reverse Mortgage Loans

These types of Mortgage Loans were recently introduced in India. They are special Loans for senior citizens who might not have a steady income. Many of them might own a property and apply for this Loan. They need to keep their property as a mortgage with the bank, which pays them a steady monthly income like EMIs.

Upon their death, the bank has the right to sell the property. The Loan amount paid to the senior citizen is directly deducted from the amount in which the real estate is sold. The residual amount is repaid to their legal heirs.

Conclusion

In addition, customers can apply for small, medium, and big-sized Home Loans and receive tax benefits, competitive interest rates, and comfortable durations. They can also refurbish, renovate, and rebuild their houses.