Loan against property is a solution to all of your needs when the amount needed is high. This is because you can get more than half of your property’s value as the mortgage loan amount. Since this is a secured type of a loan, the mortgage loan interest rates are low. This mortgage loan amount can be used for many needs and obligations. In the past decade, there have been many students who have gone abroad for higher studies. The fees for these go in lakhs and bring a high burden on the parents who have to opt for a loan.
Choosing the right mortgage loan amount becomes an issue. Like Mr. Jigish Patel whose son Veeraj has recently completed his Bachelors in engineering and now wants to move to Australia for his masters in engineering. Mr.Patel is worried because his savings cannot fulfill the need. So, he calls his friend Amit, who happens to work at Ruloans to discuss this scenario and hope for a good solution. Here is how the chat between them begins;
Amit Ruloans – Hey Jigish, how are you? Congratulations to Veeraj on getting through with this GRE and TOEFFL exams. He looks all set to apply for colleges now.
Mr. Jigish Patel – Thanks Amit. Actually that’s one reason why I called you today for help. Over the years, Ruloans has helped me through with getting the right loan for my needs. You have always helped me borrow right.
Amit Ruloans – Oh, that’s very sweet of you. It is our duty to help all customers so they get the best deals on loans. Hence we don’t even charge them a single penny. This way, they can trust our judgement.
Mr.Patel – Yes Amit, today I need the guidance from Ruloans again.
Amit Ruloans – Sure thing. We are always here. Tell me what the issue is.
Mr.Patel – Veeraj wants to study in Australia. He has begun with applying for different colleges there. I saw their prospectus and the fees are a lot.
Amit Ruloans – Okay. I think I know your problem. You were planning to use your savings right?
Mr.Patel – Yes. But how did you know?
Amit Ruloans – Mr.Patel … that’s our job. We have achieved a lot due to being disciplined all these years.
Amit Ruloans – Anyway, what is the amount we are discussing here?
Mr.Patel – Calculating his tuition fees, house rent, and money for him to spend on basic necessities, it is roughly around 25-35 lakhs.
Amit Ruloans – It’s expected from a country like Australia. The standard of living there is high and hence most of the money gets spent on basic necessities and tuition fees.
Mr.Patel – I already know that Amit. I really need your help with getting me a solution.
Amit Ruloans – Okay, the good part is that we now know your loan amount requirement.
Mr.Patel – Which loan should I take Amit?
Amit Ruloans – As per your requirement, I would suggest you take a loan against property. (LAP)
Mr.Patel – Okay Amit. But why is taking a loan against property a good choice?
You can also read: Why a loan against property is a good choice?
Amit Ruloans – It is a good choice for multiple reasons. The first reason is that this is a secured loan hence you can expect that the loan against property interest rate would be on the lower side.
Mr.Patel – Okay. That’s a good start. I can at least save some money on interest.
Amit Ruloans – Yes, you can. In fact if your credit score is very good, you can negotiate with the banks to reduce the mortgage loan interest rates and also few charges and penalty fees.
You can also read: Advantages of taking a loan against property
Mr.Patel – Wow. Really? I have just recently checked my credit score and it is 813. Thank god I listened to your advice all these years and paid all my EMI’s on time.
Amit Ruloans – Yes Mr.Patel, it is very important to pay all your debt on time. This helps build and maintain your credit score.
Amit Ruloans – The next benefit is the mortgage loan amount. From my estimate, your property value should be approximately valued at 75-80 lakhs, right?
Mr.Patel – Yes, Amit it is around the same value.
Amit Ruloans – Good. As per the loan against property process, the bank will calculate the market value of your mortgage property and then will provide you with a certain percentage of it as loan amount.
Mr. Patel – Okay. But what percentage of my property value will I get as the mortgage loan amount?
Amit Ruloans – The percentage differs from bank to bank. After the bank values your property, you can expect around 55 to 70% of your property’s value as the loan against property amount.
Amit Ruloans – In your case, you can expect a minimum of 35-50 lakhs roughly. This amount will not only help your child’s higher education needs but also help you keep a buffer amount as savings. This amount can be used for any unplanned expense for your child or for an emergency here.
You can also read: Why take a loan against property to fund your child’s higher education?
Mr.Patel – Wow. That’s so good. All my problems can be solved with this mortgage loan.
Amit Ruloans – Yes, Mr.Patel. It’s a big amount which can help you deal with all your problems.
Mr.Patel – I feel relaxed now. It’s sad to see Veeraj leave us for few years but as a father I’m happy to see my son get the best education. Thank you so much Amit for your help.
Amit Ruloans – Don’t thank me Sir. Like I said it’s my duty to help you get the best deal.
To get the best deals on a loan against property