When you face some financial issues, you may opt for a loan. But, you obviously won’t want to make it a burden for you. A loan against property can be applied only when you agree to keep a property or collateral, with the lender. Thus, the Loan Against Property Interest Rates are lower.

The steps that you need to remember and follow while taking a loan against property are:

First Step, select the Loan Amount as per your Repayment Capacity

When you decide to apply for a loan against property, you will obviously apply for a loan amount that is required. But, it should not be too high or above your capacity. When you keep a property as mortgage you can apply for a loan amount up to 70% of the value of the property, but you should apply for a loan of 30% only. In this way, the rate of interest of the loan will also go down and the loan will be within your capability.

Second Step, Opt for a Shorter Tenor if you can

If you apply for a longer loan tenor, the amount of EMI will be lower, but in the long-run you will pay more interest to the lender. So, it will be better to apply for a shorter tenor. Initially, it will feel the EMI amount is too high, but you will be able to pay less interest.

Third Step, don’t Default on your EMI Payments

If you opt for a loan amount that you can easily afford every month, then the chances will be less that you miss out any EMI or default it. However, you should ensure to pay off your loan against property EMI without defaulting or delaying your EMI payment. Otherwise, you have to pay penalty and your credit score will also go down.

To know the next steps, read: Things to Check before Applying Loan Against Property