Loan Against Property

Loan Against Property Prepayment

Why is Loan Against Property Prepayment not possible

Prepayment is a feature that borrowers can avail to part-prepay or foreclose a loan before the tenure ends. Debtors choose this facility to reduce their loan liability. However, it may not be a wise idea to opt for prepayment in Loan Against Property at all times. Learn why.

Prepayment in Property Loan – Times When It is Not Wise to Avail


1. At The Beginning Of Loan Repayment Tenure

Timing of prepayment is essential. During the initial period of the repayment tenure, the interest component of EMIs is much higher than the principal component. Opting for prepayment after paying the first few EMIs may not be wise as you do not save much while doing so.

2. If You Get Higher Returns On Other Investment

You must consider the returns you can gain by investing the available funds in any other financial scheme. If the returns are higher than the interest amount saved through prepayment as per the applicable Property Loan rates, then it is wiser to invest the money than pre-paying.

Additional Read: Types of Property to be Mortgage

3. When Prepayment Charges Are Higher Than The Interest Saved

The applicable charges on prepayment may incur a higher amount than the interest savings. In such a circumstance, opting for prepayment may not be profitable as you end up paying more than the estimated savings.

Prepayment in Loan Against Property is available against nominal charges with Bajaj Finserv, which makes it a feasible option for borrowers. Both part-prepayment and foreclosure facilities are available at nil charges for individuals availing Loan Against Property at a floating rate of interest. Thus, it becomes a profitable repayment option.

Bajaj Finserv also offers this Mortgage Loan at competitive mortgage interest rates and charges, which makes it further affordable. Other features like loan against property eligibility and document requirements also make it an attractive lending option to opt for.

Know how to apply for Loan Against Property with Bajaj Finserv and avail a substantial loan amount.