Why Loan against Property is a Better Option than Others?


750! That’s the credit score one requires to avail a personal loan. Being unsecured, banks and NBFCs look for individuals that are creditworthy to repay the loan without defaulting.

However, for someone who has never taken a loan or used a credit card, it becomes infeasible to sanction an unsecured loan.

For such individuals, financial institutions provide an alternative option – Loan Against Property.

Loan against property is a secured loan that comes with more benefits than others fail to deliver. NBFCs provide their pre-approved offers with Loan Against Property, personal loan, home loan, EMI financing on different products, and other financial services.

Loan against Property

In addition to the above, loan against property comes with several other merits, some of which include:

1. Longer loan tenures:

Unsecured loans come with tenures raging up to 5 to 8 years. On the other hand, loan against property tenures can go up to 20 years depending on the lender.

Thus, customers get flexibility in repaying the loan even if the loan amount is considerably high.

2. Lower Rates of Interest:

Compared to a personal loan, Loan Against Property Rates of Interest are substantially lower. The rate of interest for these loans can range from 12 to 15%. Therefore, the EMIs are lowered and become affordable for customers.

Loan against Property

3. Secured Loan:

A loan against property is secured; so, banks and NBFCs require a collateral against which they will sanction the loan. The collateral acts a security for the loan, and so customers don’t need to hold a high credit score for availing it.

4. Multiple Uses:

A customer can use loan against property for numerous purposes, some of which include:

5. Wedding:

Funding a wedding and that too, a large one with 1000+ guests can require considerable investment. Hence, a loan against property can come as a benefit in this case.

6. Debt Consolidation:

Consolidating debts in times of deficit can be highly unfeasible. With a loan against property, an individual can suffice this crisis and ensure business continuity.

7. Child’s education:

Sending the child to a foreign university will require substantial funds for which may opt for a loan against property India.

8. Can be Borrowed Against Diverse Properties:

Not only just commercial or personal property, but banks and NBFCs also provide such a loan against a plot as well. The only condition to be met here is that the property has to be owned by the customer.

Additional Read: Myths about Loan Against Property Busted

9. Minimal Documentation:

A customer only needs the following 3 loan against property documents:

  1. KYC Documents:– Aadhaar card, Voter ID card, Passport, Driving License, valid photo ID card issued by an employer.
  2. Proof of Property:– Property registration certificate, gift deed, patta, sales deed, chain of title, No Objection Certificate (NOC) from local Municipal Corporation, municipality, gram panchayat, or Urban Improvement Trust (UIT).
  • Address Proof – Latest electricity/telephone bill, Voter ID card, Passport.

Customers only need to transfer the original proof of property papers to the bank or NBFC after loan approval.

10. Minimal Eligibility:

Following include the loan against property eligibility:


  • Should be between the ages of 33 and 58 years.
  • Should be employed by a private or public company.


  • Should be between the ages of 25 and 70 years.
  • Should have a business vintage of at least 3 years.
  • They should file income tax returns for at least the previous year.
  • They should audit their previous year’s turnover by a CA.

Both salaried and self-employed individuals need to be a resident of India.

11. Foreclosure:

Banks and NBFCs provide the option of foreclosing the loan against property before the end of its tenure. Many financial institutions also don’t charge individual borrowers any additional fees when foreclosing the loan.

12. Part-Prepayment:

With part-prepayment, customers can pay off a substantial amount of outstanding loan amount when they have the funds available. The part-prepayment charges can be zero or minimal depending on the lender.

For the reasons mentioned above, apply for Loan Against Property is a better option than other loans.


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