Every person needs money in every stage of life and loan is the better way to fulfill those needs. You can take an amount for your requirements and can repay the amount in easy installments. So, if you have a property then you can avail the loan against property. The process is very simple and there are plenty of lenders are available in the market but there are some important points that you should consider before applying. Check out them below.
Rate of Interest
This is the most important factor to be considered before applying for a loan. Generally, the interest rate for loan against property ranges between 9% and 14%. So, you should choose wisely a lender that provides a loan with a lower interest rate. This will help you to repay the lower amount and will lower your burden of repayment.
Loan Amount
The loan amount should be chosen very carefully because at the end you have to repay the amount with interest. So you should avoid any unnecessary amount and decide an amount that fulfills your needs. For this, you can consult with a good financial expert. Also, in this scenario, you can avail around 40% to 70% amount of the total market value of the property.
Tenure
This point also plays a vital role in loan against the property because higher tenure will lend you to repay a higher amount. So, choose a tenure that provides you affordable EMI that you can manage easily without any tension. Loan against property facilitates you with higher tenure as high as 15 years.
Penalty and Processing Charges
Loan against property facility comes with some additional charges. Processing charge varies from lender to lender and ranges between 0.50% and 3% of the total loan amount. Also, you may have to pay some additional charges including service tax, statutory charges, and stamp duty charges. So, you should be aware of these and handle them wisely.
No Tax Benefits
In case of education loan or home, loan government facilitates you with some tax benefits under section 80c and 24b. But there is no tax benefit for a loan against property. So, you should choose a lender providing you a loan with better services.