Whether you are looking for finance to invest in your business, planning your dream wedding, or need funds to tackle emergency medical issues, you can avail of a loan against property by providing your house or any other possession as collateral. Since it is a secured loan, the rate of interest is lower and there are fewer chances of application rejection.
Apart from the rate of interest and monthly installments, the tenor of a Loan Against Property is also a crucial factor to consider. Deciding the ideal repayment tenor of your loan is important as it impacts the cost of borrowing. You need to understand the optimal time required to repay the loan given your current economic condition and mortgage loan requirement.
Here are the factors based on which you can decide the right tenor of your loan against property:
1. Loan amount
The loan amount you need impacts the tenor of the loan directly. Usually the higher the loan amount, the longer will be the tenor of your loan against property. The longer duration eases the repayment of the loan since the EMIs are spread out, thereby reducing the pressure on your monthly budget.
The interest outgo increases with a longer tenor. Bajaj Finserv Loan Against Property gives you the option to choose flexible tenor ranging from 2 to 20 years to repay them conveniently.
2. Your age
Your current age is another factor that determines the ideal tenor of your loan against property. If you are in your 20s or 30s, you can opt for a long loan tenor since it is likely that you will have a steady source of income and time to repay the loan. However, if you are nearing your retirement age, you should choose a short loan tenor as your income may stop or reduce after retirement.
Also, if you have a fluctuating income, it’s advisable to choose a long tenor which will result in low EMIs that you can pay without missing deadlines. With tools like Loan Against Property EMI Calculator, you can evaluate your loan EMIs and choose an appropriate tenor.
3. Interest and EMI
The interest rate on your loan and subsequent EMIs play a vital role in deciding the tenor of the loan against property. If you wish to have lower interest outgo, opt for a shorter tenor. But if you wish to make your EMIs easy to pay, opt for a longer repayment tenor.
Hence, it is important to consider factors such as age, income, and payback capability when it comes to choosing your loan against property tenor. With pre-approved offers by Bajaj Finserv, you can get money with one-step verification without the need for queues, and hefty paperwork.