China Property Collateral in Loans for Third Homes, Business News Reports

Some individuals are using property as collateral to obtain consumption loans for buying third homes, the China Business News reported, citing some commercial banks in Shanghai.

Home buyers need to pay 55 percent of the third home’s total cost as down payment and interest rate will be 10 percent to 20 percent higher than the benchmark lenging rate, the newspaper reported, citing unidentified bank officials. Property used for collateral must be fully owned by the borrower, the newspaper said.

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