Taking a loan against property is an excellent choice for individuals moving into a new home. It provides a host of benefits, including a higher loan amount, longer tenure, low-interest rates, and relatively quick disbursement. Here are a few things you must know before taking a property loan.

Four Reasons Why to Take a Property Loan 

• Repayment 

Since LAPs have a higher tenure and a considerably low-interest rate, the repayment schedule is more or less flexible. You may pay the loan off early to prevent giving a lot of money in floating interest rates, but even otherwise, you can repay the loan between one to ten years. 

• Application 

Try to research the eligibility criteria and documents required in reference to the NBFC you are borrowing from. The criteria and loan against property documents required may vary from company to company, but make sure that you have all the right documents and proofs in place before applying for the loan. 

• Repayment capacity 

This point is somewhat related to the application process, but a crucial step of getting a loan against a property is that the lender must be convinced that you will be able to pay back the loan. For this, the applicant must be a salaried individual or self-employed. The NBFC may need documents such as income statements, repayment history, CIBIL score, ongoing loans, etc. 

• Ownership 

Even though the lender will ask you to submit the property documents at the time of loan approval, you remain the property owner. But, you must make a list of all the documents that you are submitting. Also ensure you have photocopies of the documents. When your loan is repaid, ensure the lending company returns all the documents to you. 

A property loan may help finance your kids’ education, a wedding, or medical emergencies if needed. 

Additional Read: Factors Affecting Loan Against Property Eligibility (Best of 8)