A loan against property is the preferred choice for enterprises seeking capital expansion and for individuals and businesses seeking to manage their cashflows. It is a secured loan that offers funds against the value of your residential or commercial property.

Loans against property are popular because of their flexible tenures and EMI options. It is critical to choose the term of your loan against property wisely to ensure there are no hiccups in repayment. Contrary to popular belief, the maximum tenure offered under a loan against property is not always the best one, so you need to carefully analyse various factors to arrive at a suitable loan against property tenure.

Tips to Identify The Ideal Loan Against Property Tenure

Although choosing the maximum tenure available for a mortgage loan may be the easiest option, you might put yourself under more financial strain in the long run. Therefore, before finalising your loan against property tenure, it is important to consider the following factors:

• Frequency of cash inflows

  It is crucial to evaluate the amount and frequency of your cash inflows, whether you are a business owner or an employee. It will enable you to manage your EMI remittances better, which in turn will help you maintain stable working capital. The recommended range for debt to income is 21% to 35%. You should select a loan against property tenure that keeps your EMI-to-income ratio within a manageable range.

• Suitability of Maximum Tenure for a Loan Against Property

  Loan borrowers believe that the maximum tenure for a loan against property provides more time to repay and lowers the EMI. However, the borrower ignores the other side of this equation, and as a result, they end up paying more than the actual cost of their debt as the increased loan tenure leads them to pay more interest.

  At IIFL Home Loans, we help you compute your EMIs faster with the Home Loan EMI Calculator.

• Age

  Your age plays a significant role in deciding your tenure. If you are a young professional, you may want to choose the maximum tenure offered under a loan against property, as it will give you more time to repay. However, if you are nearing retirement, a shorter tenure would be a wiser choice as you will have a shorter income-earning period to repay the loan.

  Now that you know how to decide on a loan against property tenure, let us now look at the papers needed to obtain the loan.

Documents For a Loan Against Property:

The documents required for a Shakthi Loan or Secured Business Loan from IIFL Home Loans are brief and simple.

For salaried individuals:

Your documentation requirements include:

• A fully completed application form

• Identity proof (PAN, Voter Id, Passport, Aadhar, Driving License)

• Address proof (Passport, Aadhar, Voter Id, Driving License)

For self-employed individuals:

Your documentation requirements include:

• A fully completed application form

• Identity proof (PAN, Voter Id, Passport, Aadhar, Driving License)

• Address proof (Passport, Aadhar, Voter Id, Driving License)

Simply provide your basic information and upload your supporting documents to IIFL Home Loans, and your loan application will be processed instantly!

Summing Up

You should not blindly follow the maximum tenure method simply because it lowers your monthly EMIs and gives you more time to repay. Instead, you should consider the aforementioned tips and choose a loan against property tenure that will result in workable EMIs, and a reasonable period to repay the money.

At IIFL Home Loans, our Shakthi and Business Loans against property offers customisable EMI options, loan terms of up to 7 years and 10 years respectively, and loan approvals in under 30 minutes! So what are you waiting for? Apply now!

FAQs

1. How is loan against property tenure calculated?

A loan against property tenure is simply the number of years for which you want to avail the loan. It starts from the date of disbursement of the loan until the date of the last EMI payment.

2. Who decides the loan against property tenure?

You as a customer are given the choice to decide a tenure which suits your needs, subject to a maximum limit set by the lender.

3. What is the maximum loan against property tenure?

The maximum loan against property tenure refers to the upper limit provided by the lender to repay the loan. At IIFL Home Loans, our maximum loan against property tenure is 7 years for the Shakthi Loan and 10 years for the Secured Business Loan.

4. Can I reduce my loan against property tenure?

You can connect with your lender and renegotiate the terms of your loan or prepay the loan to reduce the loan tenure.

5. Can I extend my loan against property tenure?

You can extend your loan against property tenure if your lender agrees and renegotiates the terms of your loan.