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Need cash urgently? Be extra cautious when taking loan against property

Here is how loan against property offered by banks and HFCs stack up

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Loan against property

Tinesh Bhasin 



home loan

  • (LAP) is one of the cheapest ways to raise a significant amount of money for a large expense, such as children's education or marriage
  • Some lenders allow you to use LAP like an overdraft facility, where the borrower pays only for the amount used
  • These are also long-tenured . Most lenders offer a maximum tenure of 15 years
  • Most lenders also offer a loan equal to the 50-60 per cent of the property value, but they may also have a cap on the maximum loan that can be sanctioned
  • The maximum loan limit also varies. For the salaried, it
  • is lower compared to a business owner
  • Lenders also decide the loan amount based on borrower's repayment capacity, besides credit score, age and others.
  • It means, if you have other loans, your eligibility will go down
  • Don't keep the interest rate as the key criterion for choosing a lender. Evaluate them based on prepayment charges, foreclosure charges, processing fee, late payment penalty and loan-to-value ratio
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First Published: Fri, August 30 2019. 11:39 IST

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