You must have heard the term “loan against property” in the finance market. It is a loan taken on behalf of the property. The person applying for the loan must keep his/her commercial property as collateral with the lender. This type of loan is also called a secured loan. Pledge is also a type of loan against property. In a pledged loan the borrower gives an asset as collateral to the lender. The asset may include stocks, shares, residential property, or any other valuable possession. The asset is returned back to the borrower upon repayment of loan. You can also Pledge a Car on finance [รับจำนำรถยนต์ติดไฟแนนซ์, which is the term in Thai], and once the loan is repaid you get the possession back.
Documents required for availing loan against property
- Address proof of the person applying for the loan.
- Proof of age to ensure that the person applying for a loan is not a minor.
- Income documents are a must if you are applying for a loan. Income documents help the lender to calculate the eligibility of the borrower.
- Bank statements for last six month are also required. It shows the transactions that are taking place, i.e., if the borrower has any active loan.
- A cheque for payment of loan processing fee.
Process for application of loan
- Pre-qualification: This is where the process of application of loan starts. The lender assesses the borrower’s income and debts to make an estimation of the amount that can be lent.
- Application: The actual process starts from this step. The borrower here completes the application and arranges all the documents.
- Processing: Once the application is submitted the process starts. The information mentioned in the application is verified.
- Documentation: The borrower must provide all the documents required by the lender as mentioned above.
- Closing: Once the documents are verified the application is given the approval. The lender than processing the money in the borrower’s bank account.