KEY THINGS TO REMEMBER
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Property Valuation
The loan amount you can get usually depends on the market value of the property being offered as collateral. A valuer appointed by the lender will assess the property’s market value.
The valuer will provide a valuation report to the lender, including details such as the property’s location, size, condition, amenities, and market value. Ensure the property is valued correctly as the loan amount may be eligible for a loan against property tax benefits under Sec 24B and Sec 37(1) of the Income Tax Act.
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Interest Rates
Loan against property interest rates are generally lower than Personal Loan rates but higher than home loan rates. The interest rates can vary depending on several factors, such as the loan amount, loan tenure, borrower’s credit score, property value, and the lender’s policies. Generally, loan against property interest rates can range from 8% to 14% per annum. Check with your lender for the interest rates and other terms and conditions. You can even use a loan against property calculator to find your EMIs for different interest rates.
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Loan Tenure
The loan tenure for a loan against property can vary according to the lender and the borrower’s profile. Generally, the tenure for such loans can be up to 10 years or more. The tenure for a loan against property affects the monthly EMI amount. A longer tenure may result in a lower EMI. But it also means that the borrower will pay more interest over the loan’s tenure.
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Repayment Options
Check with the lender about repayment options such as prepayment, part-payment, and foreclosure. You can make EMI-based repayment. Here the borrower pays a fixed EMI every month until the loan is fully repaid. The EMI amount is calculated based on the loan amount, interest rate, and tenure.
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THANK YOU
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