There are a host of loan options available in India, but the Mortgage Loans or Loans Against Property are the ones that can be availed much easily. The primary prerequisite is that you need to have a property that can be kept as a mortgage with the lender. It is the most secure type of loan, in which the lender can recover the sanctioned loan amount by selling/auctioning the mortgaged property of the borrower if the case he/she ends up as a defaulter. Loan against property also has low-interest rates compared to the unsecured loans, which prove to be cost-effective to the buyers. Also, they help in maintaining a healthy CIBIL score, thus boosting your chances of future loan approvals.

However, there are a few cautions that you should be aware of before taking a loan against property. We have bundled out the main dos and dont’s that should be kept in mind while applying for the loan.

Things to do Before Applying

Borrow as per your requirement

Plan your finances properly before applying for a loan against property. Once the required calculations are done, evaluate the property’s value, which you would be keeping as a mortgage. If you have multiple properties and each of their’s value is enough to get the desired loan amount, choose the one with the least cost.

Ensure the big loans

If the loan amount is voluminous and the repayment reimbursement tenure is quite long, make sure that the loan is insured. Insuring your loan assuages the burden of debt in unfortunate cases when you won’t be financially strong enough to make the pending payments.

Compare the interest rates

It is recommended to check the interest rates of various lending institutions before applying for a loan against property. Apart from the cost, compare the features and services you would be getting post disbursal of the sanctioned loan amount.

Pay the EMIs a week ago of the deadline

Banks usually offer multiple payment options to the borrowers for easy and hassle-free payment of EMIs. However, most of the NBFCs generally accept payments through cheque, which requires a few days to get settled into the lender’s account. Hence, don’t wait for the advent of the deadline and pay a week before the last date.

Things you should avoid

Don’t miss payments

Secured loans like loans against property fall on the favorable court for the lenders. They can auction/sell the mortgaged property to recover the loan amount. Missing payments and further, missing multiple refunds, will give the lenders a fair excuse of doing the same. Also, it hits hard on your CIBIL score.


Avoid choosing a long tenure

Availing a loan against property with a long tenure may look pleasing owing to the fewer EMIs. However, a long tenure increases the interest rates and in the last analysis. The loan eventually becomes much more expensive than the borrower expects.

Skipping the terms and conditions can’t be afforded

Use a magnifying glass and but do read the fine prints, which are the essential elements of the loan document. Confirm the terms and conditions and check out if there are any hidden charges or not. Don’t choose the lender who has a reputation for hiding charges to sell loans. Loan against property involves your valuable asset, hence don’t be casual while going through the formalities.

READ MORE:- 5 Benefits Of Taking Joint Home Loan


Loans against property are undoubtedly cheaper alternatives to the unsecured loans, which usually have a high-interest rate. However, they do include a bit more caution, at least for the borrowers. Following the aforementioned advises will surely save you from financial crunches and help you to maintain a good credit history.