Benefits of a Loan against Property
Following are the advantages of Loan against property:
Lower interest rate
In comparison to personal loans, the rate of interest is generally lower in case of loan against property as it generally ranges between 12% and 15% while in case of personal loan the interest rate ranges are 15% to 25%.
Lower to no prepayment charges
It is easy to close loan against the property just by making prepayments towards your loan. Generally, lenders do not charge prepayments in case of loan against property.
Easy to get
These are secured loans, so banks are more than willing to provide these loans. Hence, you will not find it very difficult to get the property loan.
Loan against property is generally available for longer tenure going up to 15 years while the tenure in case of personal loan is usually up to 7 years.
Actually, there is an inverse relationship between tenure and EMI. The longer the tenure, lower will be the EMI or vice-versa. So, these become suitable for people who can’t afford to pay higher EMIs. Besides, it is advisable that a person should take a loan for the shortest tenure as the interest burden will be lower in case of short tenure loan.