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Rent receivables: Edge over personal loans

Sales representatives constantly call people from various financial instituitions entising them into applying for loans.It is important for one to be aware of the different loan optiond one can go in for befor plunging into taking a loan right away

The trend of giving a call and luring customers into taking a loan has become really popular among banks. It is quite possible that these calls tend to irritate people, especially when they don’t need a loan or are not interested in any of the options provided by the bank.

Apart from these individuals, there are people who are in a dire need of personal loans. Marriage or an unforeseen hospitalization may lead them to apply for loans. People who have their property rented out gain a better ambit. They can check out various loan options with different banks for getting loans against the future receivable rent of their property.

Most state owned banks are lending such loans at lesser or above benchmark prime lending rates. Moreover, the banks come up with attractive deals during the festive season. Although, these are loans sanctioned to the landlord against future receivable rents, there are other parameters that need to be taken care of.

This leaves us wondering which loan option we must choose. Stated here are some of the best loan options one can pick from depending on the need and urgency.

The above-mentioned loans are available only in case of properties that have been rented out to public sector undertakings (PSU), banks or recognized private companies. In these cases, the loan amount should not go beyond the future receivable rent of the property minus margin money, which may range from 20 to 25 per cent of the future rent of the unexpired rent period. The facet of utmost importance here is the assignment of future receivable rents along with a third party guarantee.

Another imperative factor is that the bank must ensure getting a mortgage of at least 1.5 times the value of the loan taken on any immovable property. There are cases when banks can also ask for a mortgage on any liquid asset including national savings certificate, kisan vikas patra or other similar schemes. It includes:

Non availability of immovable property
Low value of the rented out property
Undesirability of the landlord to sell out the property.

However, these kinds of loans require the landlord to furnish a mortgage, which certainly works out best than availing a personal loans. Now, let’s take another case in which the landlords have promised their piece of property. This is one of the underlying reasons encouraging most landlords to purchase properties through housing loans that can be repaid in the next 10-20 years. To have a fresh loan against the future receivable for the same rented out property, the landlords require seeking some other security to offer the bank. It is better for a person to avoid buying another loan under such cases. In case, the situation is unavoidable, the person could go ahead with the loan against future rent receivable.

News Source:
http://www.merinews.com/

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.