5 Aspects That You Need To Check Before Applying For A Loan Against Property


Loan against property is one of the beneficial financial products for borrowers seeking high amounts with extended tenures. One of the primary reasons to prefer this credit is its no end-usage restriction. It comes with a loan amount of up to Rs. 3.5 Crore which borrowers can invest as per their requirements. This loan, thus, helps individuals meet their high-end expenditures like purchasing residential or commercial properties, pursuing higher education offshore, financing marriages, etc. at low loan against property interest rate.

The credit amount so obtained by borrowers depends majorly on the present market value of the property to be mortgaged. Depending on property evaluation, lenders may pay up to 70% – 75% of the current price. Considering this assurance of the collateral, lenders are often lenient with the required loan against property eligibility criteria, documents, and credit score.

Thus, a loan against property is an ideal credit option to avail in case you are looking for a high amount with low EMIs, spread over an extended tenure.

Numerous reputed financial institutions currently offer loan against property with attractive features, making it challenging for borrowers to decide the best option. Given below are a few aspects that you need to check before applying for a loan against property.

  • Value Of The Property To Be Mortgaged –

As you know that this loan amount is available depending on the property’s value, check the same as per your credit requirements.

  • Offers Provided By Various Nbfcs –

Availing a loan is a crucial financial decision; hence, borrowers need to be cautious while choosing a loan against property in India. While some financial institutions provide attractive deals, there are hidden charges which may count as unexpected outflows on the borrower’s part.

On the other hand, reputed lenders like Bajaj Finserv offer Loan Against Property with nominal charges as:

  1. Processing fee (up to 1.5%)
  2. Zero charges on principal and interest statements
  • Property loan statement charges (Rs. 50)
  1. Nil foreclosure charges (floating rate of interest)

This ensures that borrowers avail the loans without any unexpected stress on their budget. They can draw the benefit of such attractive charges with easy-to-meet eligibility criteria and nominal loan against property documents required. Their loans are offered with borrower-friendly features like:

  • Hassle-free disbursal of funds
  • High-value loan amount of up to Rs. 1 Crore (salaried individuals), up to Rs. 3.5 Crore (self-employed)
  • A flexible tenure

They also bring exclusive pre-approved offers for their existing customers. These schemes make it easy and quick to avail loans. Pre-approved offers are available on several financial products that include unsecured credits like business loans, personal loans, and secured credits like home loan. Check your pre-approved offers by entering details like phone number and name.

  • Interest Rates Offered

A loan against property interest rate has a significant impact on the monthly instalments that borrowers need to pay. As an applicant, you need to make sure that the NBFC you approach provides with the best interest rates in both floating and fixed types. You can then weigh in the benefits by comparing floating interest rates vs fixed interest rates.

This analysis will help in availing a loan that provides affordable EMIs due to relatively lower interest rates.

  • Your Repayment Capability

Lenders look into the repayment capability of a borrower; however, they are not stringent about it as the mortgaged property can be liquidated to recover the outstanding amount in case of defaulters. Borrowers on their part should assess their repayment capability to avoid defaulting on the loan.

Additionally, the low rate of loan against property interest helps borrowers avoid any strain on their monthly budget and ensures they don’t default on their loan.

  • If Tax Benefits Can Be Availed

In case borrowers plan to use the funds acquired in constructing or purchasing a house, they can avail tax benefits under Section 80C and 24(b) on both interest and principal amounts.

With such a detailed idea on the various aspects of loan against property, you can now enjoy multiple beneficial features to meet all kinds of professional and personal financial goals. In fact, if you choose a competitive loan against property interest rates in the market, it can also help you consolidate your debts.

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