CAVEAT LOAN
A caveat loan allows a borrower with assets such as property or land, to get short term borrowings. The borrower will sign a SPA with the lawyers, indicating to sell the house, with the borrowed amount being the down payment. If the borrower is able to fully repay the loan, the SPA and caveat are voided. However, if the borrower is unable to fully repay, the money lender is authorized to execute the SPA, and pay the stamp duty, and will buy the house buy settling the outstanding housing loan amount with the banks.
A caveat is known as a document that can be lodged on the government records of ownership (Title) of the secured real estate. A caveat will have the authority to stop all other dealings on that property. This prevents even for the sale of the property or acts as a warning to other lenders that the property has been used in term for security.
A caveat can gives a lender an equitable interest in the property however it does not give them the ultimate right to sell the property. It is rare to find a lender that normally does a true caveat lending. Many lenders will advertise that they offer sort of caveat lending, but instead they take second mortgages and then decide to call them caveat loans.
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Caveat loan here is described as a form of short term loan that makes it an essential kind of loan for any business. As being compared to other loans, caveat loan is often described as a short term asset based loan. Among the features of the caveat loan are:
Quick Approvals
The reason why many people opt for short term loans is that these loans are sanctioned very fast and when it comes to caveat loans then approvals processes are even better. In many cases it has been observed that the caveat loan is often being sanctioned in just within 24 hours which can only be an advantage for any businessman in a hurry.
Security
From the point of view of the lender, this sort of loan is described as secured. The reason for this is due to the fact that these loans are usually being secured on the value of reliable assets by the borrower such as commercial property, house, property, etc, which help in making the recovery of the loans a lot easier.
Use of funds
When it comes to caveat loans, the sole purpose of the loan has been strictly defined. Here, the uses of the funds are being restricted to the business and nothing else. If it is found that you have been using this loan for any other purpose other than the one related to the business, then such borrowers will be taken legal action against.
Interest and tenure
Another thing that they call as a big advantage of using caveat loans is that the interest charged on such loan principal is so small. Moreover, the tenure of the loan is usually for 3 years. Therefore, when it comes to paying back, the borrowers get more time to pay the loan amount along with the suitable interest back to the lender without any hindrances.
The major benefits when you are considering for caveat loan is that the speed of approval and release of funds are quicker and easier. Mainstream banks might have taken days or even weeks to arrange a loan and this can mean that many plans are hindered and opportunities can be lost.
Besides than Caveat Loan, you may be interested in other loans services such as Personal Loan, Business Loan and SME Loan.