There are two types of loan which are given to general public by the banks or any other financial institutions i.e. clean loans and secured loans. In the first type of the loans named as clean / unsecured loans, the people have been given advances up to some specific amount. These amounts usually do not exceed from 0.500 million because these are unsecured and have been given against any personal guarantee and any kind of collateral has not been obtained against it.
The second type is secured loan where a specific percentage of amount of collateral have taken as security of the advance given to the customers. These loans have been categorized as secured as property has been mortgaged by the bank or financial institution against the load disbursed. Any kind of collateral could be obtained as security but usually the property has been being mortgaged by the contractors. The use of mortgage for contractor is a compulsory formality in the absence of which a running finances or an SME finance loan could not be sanctioned or disbursed by the competent authorities of an institution or organization. One can apply for these kinds of loans for different reasons but running finances and commercial & corporate finance have specially been sanctioned to establish the new business or to increase the working capital of a running business.
The layer will be responsible to the check the genuineness of each document provided by the processor. If satisfied from the documents he then will write his legal opinion i.e. whether this mortgage will be in favor of bank or not dully signed by him on his letter head pad. If the contractor mortgage will be in favor of bank or DFI then the processor will take the next step to get this loan sanctioned for the satisfaction of the customer.
He has also to submit his property documents for the purpose of the getting his property mortgaged with the contractor, bank or DFIs. These property documents may include the following
*Sale agreement of the house
*Credit for construction- It is used to finance construction activities
*Non encumbrance certificate from the concerned authority
*Credit for refinancing – It is used to pay off a credit which you had taken by another bank
*BTF (Balance transfer facility.
The home finances can be obtained for above mentioned 5 purposes by getting mortgage the property of an individual with the bank of contractor. First of all the processor of the loan will check each and every document provided by you and demand by him. These documents will be verified from the concerned departments if needed.