Loan against property is the mortgage offered by the banks and housing finance companies (HFC) against owned house property or even a plot. You must be having enormous amount of wealth but there are times in life, which can lead to shortage of funds for some of most important events i.e. personal occasions in family including marriages and education, starting a new or expansion of business. Loan can be taken against residential property and commercial property to execute any crucial events with ease.

To avail this, you should have stable income and clear title of property. It is also known as home equity loans. There should not be any outstanding loans on the property. Loan against property are cheaper, which can be used to meet different expenses when there will be no other source of income available. The property should be covered under an insurance policy during loan tenure.

Loan against property is a secured loan. The loan provider will do the property valuation and as per their valuation, loan amount will be sanctioned. Loan is available for any purposes except speculation. It can be also useful to repay existing expensive loans. Many important obligations can be managed by way of these loans. Amount to be sanctioned is calculated on the basis of various eligibility criteria such as income, occupation, credit history and cost of property.

EMI (Equal Monthly Installment) is the monthly installment paid to the lender for repayment of loan amount. Lenders offer loan up to the tenure of 15 years. EMI is calculated on the basis of interest rate, tenure and loan amount. Rate of interest in loan against property is low as compared to other type of loans i.e. personal loans. It differs from lender to lender accordingly to their respective base rate. Rate of interest is either fixed or floating interest rate. EMI amount will be less for longer term but the total interest amount paid will be higher.

EMI calculator will give a clear picture of repayment amounts over the tenure and how expensive the loan will result. Calculator will also give you the break up of total interest amount and principal amount paid. Individual can use calculator in different ways to get an appropriate EMI. Outflow can be adjusted by lowering the interest rate or by increasing the tenure to get a cheap EMI.

Please keep in mind; Individual should pay the EMI on time because any default in repayment will harm your credit history. Loan against property should be taken after prior discussion because lender will pledge the property in case of default in repayment of loan. Discuss quotations of different banks; select the one that serve your requirements