Key points to follow on loan against property and payment tenor

 A loan against property is a secured financing option that helps individuals cover urgent big-ticket expenses during a financial crisis. Individuals can take mortgage loans against residential as well as commercial property. 

The offered fund or amount in such secured financial products depends on the loan against property eligibility of individuals. However, other than this pointer, the essential factors of mortgage loans include tenor, interest rate, EMI payment and others. Read along!

Once individuals know about the available fund by using the loan against property calculator, they need to focus on the repayment tenor as it affects the total payable loan amount. 

Repayment tenor of loan against property is linked with the interest outgo and payable EMIs. Here, one must know that the repayment tenor for a mortgage loan can stretch up to 30 years. The longer the mortgage loan tenor, the lower its EMI. While this idea can tempt borrowers to go for 25-30 years of a mortgage loan, they need to pay higher interest. 

For instance, for a 10-year loan against property, if the interest paid is 57% of the borrowed amount, the total payable interest charges shoot up to 128% for a 20-year mortgage loan. Further, if that individual takes Rs.50 lakh mortgage loan for 25 years, they have to pay around Rs.83 lakh (167%) only as an interest amount.   

Please note that those applying for a loan against property without income proof must also repay the loan efficiently.    

Individuals with low income usually opt for a longer tenor to align with the payable EMI to their salary. If they tighten their monthly expenditure and increase EMI twice their pay, they can easily repay a mortgage loan in fewer years.

Individuals willing to take a loan against property should consider the repayment tenor and related factors to enjoy a hassle-free borrowing experience.