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On which property should I take loan commercial or residential
06-Feb-2023 (In Property Law)
Hi, I am planning on taking a loan against property. I have a few questions- A) There is a choice of 2 properties I can mortage- 1) Commercial property with a tenant for the next 30 months 2) My house property- Which one would you think is ideal B)The loan amount is only to the amount of 2.5 Cr. However the properties are worth 35 Cr and 50 Cr respectively- Is it ok to place as mortgage such properties for a small amount? C) In case I'm unable to service the debt, what is the entire procedure for debt recollection/auction by banks and how long can this process go on for?
B) It depends on the nature of business, the apprehension of the losses and turn overs and the ODs extended to which extent. However it is not advisable to mortgage a property worth this extent for a small extent of OD, because even the OD amount may not be to the extent of 2.5Cr at any given point of time, whereas the bank in collusion with loan mafias may try to cheat the customers by bringing the properties of huge values to a very meagre bidding amount. Such scandals are very much prevalent these days. Your own intelligence can solve this issue, i.e., you should arrange for assets/funds elsewhere or somehow through other sources to suffice the security for OD purpose instead of getting trapped into mafia trap.
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Adv. T Kalaiselvan
Vellore | 400+ Answers
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