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

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

Tinesh Bhasin
Last Updated at September 1, 2019 19:42 IST

Loan against property (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 loans. 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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