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Securing Finance Against Property – How to Select a Suitable Tenure

Available as high-value funding options against minimum eligibility requirements, loans against property have fast become one of the best advances in the financial market. Whether you have been looking for funding of high quantum for business investment or to address your child’s higher educational expenses, finance against property comes to the rescue.

One of the primary reasons that make a property loan favourable funding option is the availability of a long and flexible tenure. However, as beneficial this feature is, it also comes with a long-term financial commitment. It thus makes selecting the right tenure for loan repayment crucial for a good financial health in the long run. Below given is a quick take on a few pointers that should help you in selecting the right tenure for your loan against property.

A Quick Guide to Tenure Selection for Your Property Loan

Loan against property is not only a long-term financial commitment but also a funding availed against property collateral, subjecting your asset to a certain degree of risk. This makes it all the more essential to select the right tenure for timely and fail-proof loan repayment.

  1. Funding value availed

The loan amount you are seeking to avail has an immediate impact on the tenure availed. A higher loan amount usually attracts a longer tenure and vice versa. It is because depending on your financial standing and repayment capacity, the EMIs you pay are calculated based on the tenure itself.

When availing finance against property, reputed lenders often keep the tenure flexibility between 2 and 15 to 20 years to help you choose appropriately. Simultaneously, the loan amount can go up to Rs.1 Crore to 2 Crore or more depending on the lender selected and your repayment capacity.

  • Age of an individual

One’s age is also an essential factor that helps him/her determine the right tenure for property loan repayment. Depending on one’s age, he/she needs to estimate the remaining working years during which the repayment would be made.

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Thus, when seeking to benefit from the entire tenure availability, one should opt to avail the loan early on in their career. Contrarily, if you are availing the loan late in your career, you would have to settle for a shorter tenure.

  • Interest amount payable

The total interest amount payable for a loan is also tied to the tenure selected, and based on the rate applicable, determines the total cost of the loan. Thus, irrespective of the interest rate applicable, a long tenure would inadvertently attract a higher total interest payable and vice versa. You would thus need to strike a balance between the total interest payout and your loan affordability when selecting the suitable tenure.

  • EMIs payable

Your tenure selection is also linked to the EMIs payable as a consequence of the interest charge and principal amount selected. The right tenure selection helps keep your monthly payouts in check while also making the total loan liability affordable based on your financial standing.

With these considerations in mind, you can now select the right tenure for your finance against property repayment. To find the most appropriate tenure flexibility and improve affordability, make sure to carry out a widespread market comparison of available lending institutions.

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