Borrowers can apply for a loan against property if they need financial assistance for various expenses. To get this loan, lenders require the borrower to pledge their property as collateral. With the loan amount, a borrower can pay for their child’s academic expenses, business costs, medical bills, or any other expense that they face. A loan against property gives much more freedom when it comes to end-usage as compared to an education loan or home loan.
While a loan against property can prove to be of great help, one should be aware of a few things before they go ahead and apply for one. So, take a look at a list of things that every borrower should keep in mind before they apply for loan against property:
- Be aware of the required loan amount
It can get difficult to repay a loan amount that is very high. This is why it is always considered good practice to not borrow an excessive loan amount. Make sure to calculate all the expenses that you have incurred or are going to incur before applying for the loan. Doing this will give an idea of the exact loan amount required.
- Check with the lender regarding their eligibility criteria for a loan against property
For a loan against property, most financial institutions require the applicant to be an Indian citizen, earn a steady monthly income, and to have completed 25 years of age. However, the eligibility criteria could differ from lender to lender. This is why it is always best to check with the lender regarding their eligibility criteria for a loan against property.
- Choose the repayment tenure wisely
For a loan against property, financial institutions usually offer borrowers a period of up to 10 to 15 years to repay the loan. Now, you either choose to opt for a long repayment tenure to keep the EMI payments small or choose to repay the loan against property in a short repayment tenure to save money on interest. Decide on the repayment tenure based on whatever suits your budget. You can also make use of a loan against property EMI calculator to check different tenures and find one that is suitable.
- Use a loan against property EMI calculator
Before taking a loan, it is best to be aware of its monthly instalments. This is to ensure that there are no problems when it comes to repaying the loan. For this, borrowers should make use of a loan against property EMI calculator. The loan against property calculator will help in displaying the loan’s EMIs, based on which you can decide whether to go for the loan or look for a better option.
After going through these pointers, it becomes much easier to ensure that the lender offers a suitable loan plan. Also, focus on the interest rate offered as it can have a significant impact on the monthly instalments of the loan against property.