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Things to Keep in Mind While Taking Loan Against Property

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Considering a Loan Against Property? Before opting for it, let's talk about a few vital pointers that can make your borrowing journey smooth and stress-free.

Loan Amount Evaluation: Assess the value of your property and determine the loan amount you are eligible for. Remember, the loan amount will be a percentage of your property's market value.

Interest Rates: Compare interest rates across lenders. A lower rate can mean significant savings over time.

Repayment Capacity: Calculate your repayment capacity before committing. Factor in your current financial commitments to ensure you can comfortably manage the EMI payments.

Loan Tenure: Shorter tenures might result in higher EMIs but lower overall interest payments. Choose what aligns with your financial goals.

Property Valuation: Lenders evaluate your property's worth. Ensure it is appraised correctly to maximise your loan eligibility.

Legal Scrutiny: Thoroughly check the property's legal status. Any disputes can hinder your loan approval.

Loan-to-Value Ratio: Understand the LTV ratio - the loan amount compared to the property's value. A higher LTV means a bigger loan, but a lender may charge higher interest.

Processing Fees: Inquire about processing fees, documentation charges, and hidden costs. These can impact your overall borrowing cost.

Prepayment and Foreclosure: Be aware of prepayment and foreclosure terms. Some lenders may charge penalties for paying off the loan early.

EMI Protection: Consider EMI protection insurance to ensure your family's financial security in case of unforeseen events.

Taking a loan against property can be a strategic financial move. By keeping these factors in mind, you can make an informed decision that aligns with your financial goals.

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