5 Rules to Follow when you Taking a Loan against Property

Loan Against Property is a secured financial tool that allows individuals to borrow money by keeping their property as a security with the lender. The property pledged by the applicant can be utilized for their persona use.

If you are looking for a loan to finance your wedding, education, vacation or any medical emergencies, then Loan Against Property is a great way of enjoying credit at a lower interest rate and flexible repayment tenure.

However, you must make the most out of your property loan, which can be done with some simple tips. Let us look at some rules that one must follow while taking Loan Against Property.

Rules for Loan Against Property

Different lenders offer different loan terms to applicants based on their age, income, property details and many more. The terms can be negotiated with the lender if you know more about what you want and what the lender is offering you.

The below rules will help you make the right decision,

  1. Know Your Loan Requirements: Before you apply for the loan against property online, make sure to carefully analyze your expenses, your assets, liabilities any credit debt you may have. It will help you in calculating the loan amount that you want to borrow.

Along with the amount, it is always a great choice to know where you want to spend the money and how you plan on repaying it. This plan will help you in negotiating with the lender for the right loan terms.

  1. Opt for tenure and interest rate carefully: Once the loan is financialised, next you have to choose your loan tenure and interest rate carefully. Though the range of loan against property interest rate is already defined, you can negotiate with the lender as this is a secured loan. A longer tenure and a less interest rate will reduce your financial burden and a shorter tenure, and more interest rate will increase your burden. Keeping both into consideration, make the right choice.

To help with your negotiations, you can use the Loan Against Property calculator, which based on your interest rate, tenure and loan amount will give you an estimate of the EMI you are required to pay for the amount borrowed.

  1. Make Timely Payments: No matter how much loan you are taking, make sure all the payments are done on time. A delay can cause you some penalty, increasing the cost of borrowing. The late payments also impact your credit score and may reduce your possibility of getting a loan in the future. To avoid any such issue, make sure to pay the EMI on time.
  1. Get Insurance for your loan: If you are taking debt for a longer duration, then it is always recommended to cover the borrowed amount through insurance. In case of any unfortunate event, the insurance will ensure that your family does not suffer any financial difficulty while repaying the outstanding amount or lose the property used as collateral, due to non-payment.
  1. Read the terms and Conditions: The loan documents is very cumbersome and comes with a lot of terms and conditions. While many people ignore these documents, you must read all the terms and conditions carefully to avoid any unplanned surprises in the future. Some common things to know are.

Processing Fee

Some lenders also charge extra processing fees being charged which can increase your cost of borrowing.

Documents Needed for Loan Against Property

For a Property loan, you may also be required to submit some documents like:

  1. Duly signed and completed application form
  2. Income proof – salary slips, Form 16, and bank account statement (for salaried applicants). Bank statement, financial statements, and income tax returns (if you are self-employed)
  3. Know-your-customer documents – identity, signature, address, and name and birth date proof.
  4. All documents related to the title of the property.
  5. Check for the processing fees

These above 5 rules will help you in understanding the Loan Against property details and in making an informed decision.


With the digital age, Loan Against Property has become an easy and simple process in India. You can directly apply through the lender’s website or mobile app. You must choose a reputed financial institution to ensure that you do not face a financial burden later.