A property loan is a suitable option for individuals who are looking to avail a significant amount than a conventional unsecured loan cannot provide. A loan against property is beneficial in case you want to start your own business, construct a second story, renovate your home, or even host a grand destination wedding.
Here are a few rules an individual should follow when they opt for a loan against property:
Rule 1: Do not borrow more than you can repay-
Financial institutions can offer a loan amount of up to 75% of the collateral’s current market value.
Borrowers should be aware that they do not avail more than their repayment capability. It can increase the chances of default in the payment. They should try to keep the EMI amount under 50% of their monthly income.
Rule 2: Opt for a shorter tenor-
The tenor in case of a credit availed against property can range up to 20 years. Borrowers should choose a short tenor when going through the loan against property process online as it will considerably reduce the total cost associated with such credits.
Rule 3: Compare the interest rates and other fees-
Interest rates and additional fees such as foreclosure charges, processing charges, etc. can vary from lender to lender. Borrowers should select a lender that offers minimum charges so that they can make the most of their credit.
Additionally, make sure that you are aware of the eligibility criteria and the documents required.
Make sure to consider all the points mentioned above before taking part in the loan against property apply online process.
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