Property owners or individuals who have invested in a residential or commercial property or even land can pledge this property they own as collateral or security and avail of a loan against it at any time. These types of loans are known as loans against property, mortgage loans or simply property loans.
This article tackles an important component of the loan against property application process, the area converter. However, before we talk about this online tool in detail, let us understand how loans against property work.
Loans Against Property and How They Work
The working of property loans is simple. The property owner borrows a percentage of the current market value of their property as a loan against the property. The sanctioned loan amount depends on several factors, the most important being the current market value of the pledged collateral. Since the loan is backed by security, the risk for lenders is minimal and consequently, borrowers can secure the loan at low or highly affordable property loan interest rate. Once the loan borrower repays the loan, the property is transferred back into the borrower’s name and the lender thereafter loses all legal rights over the property.
Several factors add to the popularity of loans against property, the most important being high loan sanctions, low loan-against-property interest rates, long repayment tenors, and flexible end-use. The application process is simple and the easy availability of online tools further makes the application process simpler. For instance, loan against property applicants can use the eligibility calculator to ascertain the loan amount they are eligible to apply for. They can use the EMI calculator for budgeting and repayment planning and the area conversion calculator to convert the area of their property from a unit in which they know the area to another unit in which their lender requires the property area to be mentioned.
What is an Area Converter? What Are its Benefits?
The use of local measurement units is quite prevalent in various parts of India. The land measurement units used in the Northern part of India are quite different from the land measurement units used in Southern or Western India. Therefore, to ensure uniformity and coherency, lenders use a standard system of unit measurement. When one applies for a loan against property or property loan, lenders ask borrowers to quote the area being pledged as security in units that are a part of the International System of Units. If you do know your property’s area in a locally-used unit, you can use a land area converter or an area converter to convert the land area from one unit to another.
Land area converters are online tools that have all the area conversion units fed into them. For instance, if you know the area of your property in Bigha or Biswa, you can choose Bigha or Biswa from the first drop-down menu of the calculator and under the second drop-down menu, simply select the unit to which you wish to convert your land area. The area converter has all the different conversion formulas fed into it and therefore, it can be used to convert land or property area from any unit to another. The area converter is also free to use and one need not pay any additional fee to use it. More importantly, these calculators are quite freely available on the internet. If you search the internet for an area converter, you will find many different options to choose from.
Individuals planning to apply for a loan against property can also use an area converter calculator as it helps borrowers save significantly on time and effort. Since the calculator has all the formulas fed into it, loan applicants need not remember the formula to convert one land area unit to another. This saves loan applicants a lot of time and effort. Plus, the calculator also completely eliminates the chances of any kind of errors entering the calculations, the chances of which are quite high when one converts land area manually. In conclusion, a land area converter can make the life of anyone in the process of making a loan against property application much simpler. All loan applicants must make use of this handy tool along with other online handy tools, such as the loan against property EMI calculator and the loan against property eligibility calculator.
