Considerations while opting for a loan against property

by Finway FSC Empowering People Financially

Property is always considered a very worthy asset. This is because when one has property, he/she can have liquidity of money at all times. Selling the property is one way of liquidating it, and the other most convenient way is to take a loan against property. Selling the property is not a great option as the money from it won't last long. In this situation, you can always succumb to loan against the property. What are the considerations you need to opt for a loan against property?

Loan against property is available based on the following factors:

1. Consistency of the income so as to check the feasibility of the repayment of the property.

2. Market evaluation of the property

3. Whether the property is registered or not.

Based on these aspects, the loan can be given to the salaried, self-employed, business professionals and all those who fulfill the above criteria.

What are some rules that one must follow for taking a loan against property?

Be aware of your repayment capacity

To do this, you must get your property evaluated. Based on that you can get the loan anywhere between 50 to 90% of the amount. Using the EMI Calculator, you can always perceive what you will be paying as your EMI. This will help you comprehend your monthly expenses as well as understand the contingency of the entire process.

Choose a short tenure Loan

Although choosing a long term loan sounds more lucrative as the EMI's to be paid will be small; however, as time advances, you will realize that you are paying a large sum of money just as interest. To avoid this, the best way is to choose a short term for this kind of loan. Since this loan is flexible, it can be altered from long term to short term as your repayment option increases.

Pay on time

Loan against property involves your valuable and hard-earned property as the collateral. It is very crucial to be upfront about the payments. Do not delay the payments as the chances of delay may have serious consequences. Unlike the unsecured business loan, this loan amount can be used for any purpose, however, this feature should not act as a hindrance where you spend the money recklessly.

Do read the terms and conditions carefully before plunging into the loan process.