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

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

• 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