How to Choose the Ideal Tenure for your Loan Against Property?

Loan against property is a type of loan which gives you the desired financial cushion by borrowing funds on your residential or commercial or industrial property. It is a secured loan and your property is pledged as collateral. You enjoy the flexibility of using the funds for personal or business purposes. It is important to choose the right lender. It is equally important to decide the apt tenure for your loan. For instance, younger applicants may have the ability of choosing a longer repayment tenure.

How to Identify The Ideal Tenure on a Property Loan?

Choosing the ideal tenure on a property loan is extremely important for your financial planning. Your choice can reduce your overall loan burden. Hence, it is vital to check certain factors before making a decision. Here are the parameters based on which you can opt for the right tenure:

1) Income

As a salaried or self employed individual, you would be receiving a certain amount as your monthly income. This would be the basis of your decision, since the amount you earn will be an important factor in determining how quickly you can repay.

2) Loan Amount

You need to keep in mind that the higher the loan amount, the bigger will be your EMI, and thus a longer time may be needed to repay the loan. A long tenure eases the EMI amount. However, you also need to bear in mind that the interest outgo increases when you stretch the tenure. This, in effect, means that your loan against property becomes costlier.

3) Age

Younger applicants, who are in their mid 30s or early 40s may be able to choose the longest possible tenure offered for a loan against property. This is because you still have a long way to go before retirement. However, if you are close to retirement age, you will need to consider a shorter tenure.

4) Interest Rate / Monthly EMI

If you want to decrease your EMI, you must maximize your tenure. On the other hand, if you want to reduce your interest outgo, you must opt for a short tenure. The interest amount that you pay on your loan varies based on your tenure. So if you choose to repay your loan against property over a shorter period of time, you will not be paying as much interest. However, this has to be well planned as you do not want to end up making your EMIs too difficult to manage.

A lender who offers a blend of the best features of a LAP loan along with flexibility in tenure is the most apt for you. SMFG India Credit offers flexible tenures of up to 15 years for a loan against property. Our interest rates are attractive, and are determined based on a number of factors including your credit score, nature of employment, age, income, existing debts, etc. as well as our policy at the time of loan application.

To have a better understanding of the ideal loan against property tenure, please use our LAP EMI Calculator. All you have to do is enter the loan amount, interest rate and tenure. You can then see the resulting EMI. You can then vary the tenure and then select one which gives you the perfect balance between an EMI amount that does not stretch your finances, and at the same time, a tenure that allows you to repay your loan as quickly as possible.

Must Read: How to Get Loan Against Property without Difficulty

Benefits of SMFG India Credit’s Loan Against Property:

1. Online application is one of the most convenient ways of applying for a loan against property. Just click on the “Apply now” button on this page and select “Loan against Property”. Submit a few details, and you are done. . Our representatives will thereafter get in touch with you and take the process forward.
2. SMFG India Credit offers a LAP EMI calculator offering efficiency in understanding your EMI potential. It is an extremely easy-to-use tool. All you need to do is to enter your preferred, tenure, interest rate, and loan amount and you will get your monthly financial outflow.
3. SMFG India Credit offers loan amounts upto a maximum of 60%-70% of the value of the property pledged. The final value offered will depend on several factors, including your repayment capacity and our policy at the time of loan application. To get an estimate of the maximum amount you may be able to get, use our free LTV or Loan to Value calculator.

Documents Loan Against Property:

SMFG India Credit’s document list for a loan against property is very easy to understand. Some of the basic documents are:

1. As a salaried individual, you need to submit proof of identity (PAN card, voters ID, driving license, employee card), proof of income (last 3 months’ salary slips, 2 years’ form 16, 6 months’ bank statement with salary credit), proof of residence (Aadhaar Card*, latest electricity bill/Piped gas monthly bill, ration card, property tax/water bill).
2. As a self-employed individual, you need to submit the last 2 years’ ITR with computation, CA audited financial wherever applicable, 6 months primary bank statement as your proof of income.
3. Property related documents will also be requested.

*Terms and conditions applicable. Loans are sanctioned at the discretion of SMFG India Credit. 

Must Read: How Can I Utilise A Loan Against Property?

Loan Against Property Eligibility:

You may be eligible for a SMFG India Credit loan against property as a salaried resident and as a self-employed resident. Below are a few of the basic criteria:

Additionally:

• Applicants must be between 21 - 65 years of age
• Salaried applicants must be earning at least INR 25,000 per month (Mumbai & Delhi residents), or INR 20,000 (residents of other Indian cities)
• Self employed individuals must earn the minimum required profit after taxes as per industry and our policy at the time of loan application
• Minimum CIBIL score of 700.

For more information, please check our Loan Against Property eligibility criteria, or contact us.