5 factors to consider before you take a loan against property

A loan against property (LAP) is a form of secured borrowing, also called mortgage loans, in which you pledge a property you own in return for a high-value loan amount at economical interest rates. The market for loans against property has gathered popularity in the country, with a growth rate of 22% through 2023.

If you need substantial funding but want an alternative to selling a property, mortgage loans may be your best bet. However, to truly benefit from this form of financing, consider these 5 factors before taking a loan against property.

Need a large sum of money to fund a wedding, expand your business, or cover medical emergencies? A loan against property is the answer! By pledging your property, you can access high-value loans at competitive interest rates, giving you the freedom to fulfil your goals without parting with your asset. With Bajaj Finance quick approvals and minimal documentation, achieving your dreams has never been easier. By using your property as collateral, you can unlock access to large funds of up to Rs. 10.50 crore—it is a smart way to manage your finances with ease! Get funds within 72 hours* of approval.

The loan amount you can get

Under the umbrella of a loan against property fall loans like loan against land, home mortgage loan, land mortgage loan, loan against plot and mortgage loan against agricultural land. The common practice is that lenders offer you a percentage of the market value of the property you pledge as a loan.

Did you know your property can act as a financial cushion during life’s critical moments? Whether it is funding your child’s education or buying a second home, Bajaj Finserv Loan Against Property offers flexible repayment tenures and attractive interest rates. With a Bajaj Finserv Loan Against Property, you can unlock high-value funding at competitive interest rates. Whether it is for medical emergencies, business growth, or personal goals, your property empowers you to access the resources you need with ease. Don’t wait—Get our loan against property of up to Rs. 10.50 crore and turn your asset into a solution!

The interest rate offered on the loan

Generally, property mortgage loans offer cost-effective interest rates as a security backs them.

However, this rate can vary from lender to lender. Additionally, you have the choice of choosing between a fixed and a floating interest rate on your mortgage loan. One lender offering affordable rates is the Bajaj Finserv Loan Against Property.

The repayment tenor and the resultant EMIs

Being a secured financing, loans against property usually offer you a long tenor up to 15 years. Increasing your repayment tenor reduces the EMIs you pay each month. However, longer tenors also mean that you pay more interest in the long run. That’s why it is advisable to keep your mortgage loan tenor as short as possible.

Tax benefits you can avail

Like reverse mortgage loan that give you tax sops under certain conditions, mortgage loans give you tax benefits if you can show that you are using the loan to finance your housing needs. Section 24B allows for interest exemptions of up to Rs. 2 lakh on house mortgage loans. This means that if you use the loan as a site purchase loan to buy land and build a house, you can claim interest deductions.

Pro tip: Instead of letting your property sit idle, why not use it to secure a loan for your financial needs? From competitive interest rates to flexible tenures, Bajaj Finserv Loan Against Property ensures you get the funds you need without stress. Whether it is for personal or professional growth, now is the time to make your property a stepping stone to success. Get loan of up to Rs. 10.50 crore against your property within 72 hours* of the approval.

The prepayment and foreclosure fees

Usually, prepayment and foreclosure fees are around 2% to 4% on fixed-rate loans. However, you typically benefit from zero charges on prepayments and foreclosures, if all borrowers and co-borrowers are individuals, loan availed on floating interest rates, and loan taken for purposes other than business use, then there will be no foreclosure/ part-prepayment charges. However, apart from above situation nominal part pre-payment charges are applicable for term Loan up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part-prepayment. Part pre-payment charges are not applicable for Flexi Term Loan (Flexi Dropline) and Hybrid Flexi. Further, loans against property with Flexi features enable you to borrow from your approved sanction whenever you need and pay interest only on the amount utilised. Additionally, it makes your borrowing easier by allowing you to pay interest only EMIs for up to the first 4 years of the term.

Additional Read: 4 factors that affect the interest rate for loan against property

To make the most of these attractive features and fasten your loan disbursal, check your pre-approved loan offer from Bajaj Finserv. Doing so will give you instant approval and access to customised loan financing.

Are you holding back on your plans due to lack of funds? A Bajaj Finserv Loan Against Property offers a hassle-free solution. Use your property’s market value to unlock substantial funds at low interest rates. With easy prepayment options and minimal documentation, your financial aspirations are closer than ever. Get a loan of up to Rs. 10.50 crore with the option of interest-only EMIs during the initial tenure.