Five Must Know Facts About Loan Against Property In India

While there is much to be known, here are the 5 facts that you must know about opting for a loan against property in India :

1. It has more competitive interest rates.

A loan against property is a secure form of a personal loan. Since you have collateral, lenders don’t require a guarantor or repayment capability in terms of credit score. Therefore, you enjoy much lower interest rates as compared to non-secure personal loans.

2. LTV (Loan to value) ratio is a very important factor.

Offering property as collateral is a big risk. Hence, it is essential to ensure that you receive a suitable amount against it. It gets a bit more complicated when you take a loan against your residence or business property for the foreseeable future. The optimal LTV ratio for loan against property in India is 80%; however, the amount may be much lower if you are currently paying EMIs. Lenders may incorporate payables into the calculations and offer small amounts. If the amount is too low, then you should choose one of the other alternatives as the risk is much bigger than the reward in the case of a loan against property.

3. Right amount of loan and EMI is vital.

Most people use it as a personal loan of sorts. They take it for their children’s education, wedding or medical expenses. So, it is mandatory to ensure that it suffices your requirements and is worth the collateral. EMIs can change over a period of time. Floating and fixed interest rates on loan against property can change based on external factors such as stock market, world economics etc. The EMIs should fit in your earnings comfortably enough so that you can repay them easily. Missing EMIs on such loans can be a very expensive mistake. So, estimate your financial situation carefully and choose these two factors at the best of your ability.

4. You may lose collateral (property) if you fail to repay loan.

If you fail to repay this loan, the bank will take the collateral into custody and sell it. So, if you are taking a loan against your residence or business property, your risk is a lot more than just the loss of property. You and your family could lose your home or you could lose your office. It is too big a loss to recover from. Therefore, realistic understandings of these facts are essential before you accept such a big responsibility.

5. Do not ignore the prepayment clause.

Most loans are taken because you cannot accumulate the needed amount in a specified time. For most borrowers though, it is easy to gather the required amount over an extended period of time. So, it makes sense to keep the option of prepaying the loan open. However, most banks do not want you to prepay the loan as they lose their interest for the remaining period. Hence, they levy heavy penalties to discourage you. Therefore, you should take a closer look at that cause too.

The Types of AI and the Ways it is Reshaping IT

Artificial Intelligence (AI) technology is reshaping the way enterprises extract insights from data. The Gartner’s most recent hype cycle report on Types of AI points out that AI is the most favourable CIO technology initiative for the next five years as a source of business transformation.

PwC predicts that by 2030, AI can potentially contribute around $15.7 trillion to the global economy.

Many organizations believe that AI is not just a business enabler, but that it is having fundamental impacts on the function itself. AI is automating some long-standing functions to deliver upon their demand for innovative approaches and greater involvement from the IT departments.

Long story short, AI is a big deal. Various flavors of cognitive capabilities make AI a success. It becomes critical for enterprises and business leaders to understand the types of AI and the impact that it will have on the IT operations and market.

Five types of Artificial Intelligence 1. Machine Learning
In the current scenario, machine learning (ML) is the most relevant and popular subset of AI. The Executive’s Guide to the real-world AI, a recent report by Harvard Business Review Analytic Services, stated that ML has been around for years and has matured into a technology.

ML allows computing devices to self-learn from data and implement those findings without any human intervention. Often when a solution/result is hidden in a huge data set, ML is really very helpful. ML is outstanding at data processing and pattern recognition as it takes a fraction of the time that a manual process would take.

Use Cases
Just to list a few of the ML use cases in the real world, ML is used in fraud detection, portfolio management, and risk analysis for financial services. It is also used for targeted marketing campaigns, GPS-based fleet tracking solutions and travel predictions.

2. Deep Learning
Any computer program that does something smart is powered by AI, which is an umbrella term that holds ML as a subset. Here, Deep learning is a subset of ML that works towards mimicking the human mind really closely.

CompTIA explains that deep learning allows computer programs to process the problems in multiple layers, simulating the human brain analytical capabilities. The deep learning technologies extract the meaning out of information to build context. While, to increase the chances of getting the correct conclusion, deep learning empowers computer applications to understand the various components of the inputs such as text or visual images.

One explanation by deep AI says that this technology learns from processing the labelled data that is provided during the training. To process the labelled data, deep learning uses neural networks (yeh, that’s what they call them). The output of this processing is used to learn the attributes of the input that were required to come to the correct output. As soon as the sufficient number of inputs have been processed as examples, the so-called neural network can start processing new data.

The Benefits Of A Home Loan EMI Calculator In India

A home loan calculator in India helps you to get an approximate estimate for the EMI levied on a selected property. While this may seem obvious, there are quite a few benefits connected with this online tool. Among other things, it helps users to make informed decisions and gives them a better understanding of the market. Apart from calculating the EMI, this free online tool can also come in handy in other situations as well. Let’s take a look at some of these:

First timer benefit: As a first time house owner, you will have certain expectations when it comes to your home. It is difficult though to know the real estate market well enough to anticipate important decisions concerning your home and home loan. The type of property, location as well as the number of rooms will affect the cost of the same. Whether your dream home is a duplex in the city or an apartment in the suburbs, a good EMI calculator for home loan can help you to estimate the area of the house based on the EMI you can manage every month. With EMI calculations made in advance, it will be easy for you to know whether to hunt for a 1 BHK in SoBo or a 3 BHK in Noida. Most financial experts advise to opt for home loan EMI which is approximately 20 to 30 percent of your total income. Factoring this makes it easier to calculate the EMI and find the most suitable property.

Ease of access: Available as a free tool online, a home loan calculator is available around the clock. But what else can you do? Most calculators help you to check the rates of various properties for possible loan tenures and offer a standard home loan interest rate. There are other EMI calculators that will allow you to enter the interest rate that you are comfortable with. It is important to understand that several finance companies offer different rates. A borrower, who has a good track record of loan returns, can find that the interest rate is negotiable as well. Keeping this in mind, it makes sense to identify the right combination of interest rate and loan term while undertaking your calculations.

Insights: Some calculators will also help you to understand how to customize your loan to suit your financial needs. For example, it is understood that extending the loan term for a longer period of time will lower the EMIs. That, however, means that much of your payment will be used to pay off the interest rate, with relatively little going to the principal amount. A home loan EMI calculator will help you to get a better estimate on how much you will have to pay while enabling you to make informed decisions.

These online tools come with a few limitations, though. An EMI calculator may not be enough to understand the impact of the fixed and floating interest rates in India. It will also be unable to calculate the EMIs for customized repayment schemes. It is advisable, thus, to take these rough estimates as a basic guideline to help you to select the right property, loan term and EMI.