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Loan Against Property: Essential Tips to Avoid 5 Costly Mistakes
Posted on Monday, December 9th, 2024 | By IndusInd Bank
Summary: Maximise the benefits of a loan against property by comparing interest rates, selecting a suitable repayment tenure, and borrowing an amount that aligns with your repayment capacity.
Leveraging the value of your property by taking out a loan against it can be a prudent financial decision. It provides access to substantial funds for a variety of purposes, including home renovation, higher education, medical expenses, debt consolidation, and business expansion. However, like any financial decision, navigating the world of loans against property demands careful consideration. One wrong decision can jeopardise your prospects of securing the loan. Here are five essential tips to help you avoid costly mistakes when considering a loan against your property.
| Mistake | Expert Tip |
| Not Comparing Interest Rates | The loan against property interest rate determines whether you can repay the loan easily and on time. Compare the interest rates and choose a lender that provides reasonable rates and flexible repayment terms. |
| Not Considering Processing Fees and Prepayment Charges | Since a loan against property involves a substantial amount, even a slightly higher processing fee can significantly increase the overall cost of borrowing. Prepayment charges are imposed if you decide to close your loan before the specified time. Clarify the charges involved before accepting the loan agreement. |
| Not Opting for the Right Tenure | The loan tenure impacts your EMI payment. Choosing a longer tenure might reduce your EMIs, but will increase the overall interest paid. On the other hand, opting for a shorter tenure might increase the EMI amount but it will decrease the total amount of interest paid. Choose a loan term that makes EMIs manageable without affecting other financial goals. |
| Borrowing More Than You Can Repay | A loan against property involves collateral and you may lose possession of your property in case of loan default. Borrow what you need and can easily repay. This will allow you to handle your financial emergency while protecting your property. |
| Not Factoring in Existing Liabilities | Lenders assess your debt-to-income ratio to evaluate your repayment capacity. If you already have substantial debts, borrow what you can comfortably repay to prevent financial strain. |
Apply for a Loan Against Property with IndusInd Bank
If you want to maximise the value of your property, apply for a loan against it with IndusInd Bank and unlock a treasure of financial opportunities. Here’s why our loan against property stands out as the best option for meeting your financial goals:
- Access to higher loan amounts tailored for personal or business requirements
- Streamlined and efficient process for long-term funding
- Flexibility to repay the loan over 20 years
- Convenient doorstep services to save your valuable time and effort
Eligibility Criteria for IndusInd Bank’s Loan Against Property
For Salaried Individuals:
- Individuals with permanent jobs in a public sector undertaking, MNC, listed public limited company, government/semi-government undertaking, or a well-known private limited company with a CRISIL rating of BB+ or a turnover exceeding INR 50 crores, as well as NRIs, may apply
- Applicants must be at least 21 years old
- Maximum age at the time of loan maturity is 65 or retirement age, whichever is lower
For Self-Employed Professionals/Non-Professionals:
Eligible applicants include professionals such as Doctors (MBBS, MS, MD, Diploma in Ophthalmology [D.G.O], etc.), Bachelor of Dental Surgery (BDS) and D.O.M.S i.e. Diploma in Ophthalmic Medicine and Surgery), Chartered Accountants, Cost Accountants, Architects, Engineers (BE/B. Tech, ME/M Tech, M.Sc. Electronics, AMIE, MS (IIT) and BSc-Engineering), Master in Business Administration (MBA/PGDM/MMS), Company Secretary/CFA working as professional consultants in their respective core fields
- Any individual who files an IT return can apply
- Applicants must be at least 21 years old (if income is taken into account) or 18 years old (if income is not taken into account)
- Applicants’ age at loan maturity should not exceed 70 years (if income is considered) or 75 years (if income is not considered)
Check your eligibility and secure a hassle-free loan against property with IndusInd Bank. Apply online now!
Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.
