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Explain About Different Types of Term Loan Against Property?

The lending industry in India offers both secure and unsecured credit options, with provision to avail these loans as either a long-term, an intermediate-term, or a short-term loan. They differ in a loan period, EMI amount, loan amount, interest rates, etc.

Short-term loans are appropriate to cater to urgent cash crunches while long-term loans are ideal for fulfilling hefty expenses such as wedding cost, education, etc. 

Given below is a brief elaboration on short, intermediate and long term loan on property. 

What is a short-term loan?

Advances provided by financial institutions and NBFCs for a shorter tenor approximately below 12 months is known as a short-term loan. The loan amount helps you to meet urgent cash crunches. 

Advantages of short-term loan 

  1. You get faster approval and disbursal for a short term loan. 
  2. As the loan tenor is short, the interest rate incurred is less than compared to long term loans. 
  3. A short term loan can be availed with a low credit score. 
  4. The documentation process and application procedure is minimal and hassle-free. 
  5. It helps you to improve your credit score. 

What is an intermediate-term loan?

Credits availed with a tenor more than 12 months but less than 36 months is known as an intermediate-term loan. Such loans are usually unsecured and offer an attractive interest rate. 

Advantages of an intermediate-term loan  

  1. You can meet short term professional needs with the amount such as working capital management, upgrading infrastructure, etc. 
  2. The loan tenor is longer than a short-term loan allowing you to make the payments with ease. 
  3. The total cost of a loan is lesser compared to long term loan on the property. 

What is a long-term loan?

Loans sanctioned with a longer tenor which can be extended up to 240 months are known as long term loan. Loan Against Property is one of the most popular long term loan options. The loan amount for such advances is substantial and can be used to meet various financial needs, such as hefty medical expenses, wedding costs, education expenditures, professional expenses, etc.

Advantages of long-term loans

The loan amount availed from a long-term loan against property is substantial and can be used to meet hefty expenditures. 

Longer tenor makes your EMIs affordable and does not strain your budget. However, before you avail loan against property, you should know how to determine the ideal tenor of your loan against property. 

Such loans are availed against collateral which removes the risk of a default on payment. 

  1. These loans are disbursed against a mortgaged asset, which lowers the associated risk by a significant margin. Lenders can offer longer tenor, top-up facility, and several other borrower-friendly features to assist in repayments.  
  2. For instance, loan against property interest rates is comparatively lower, which decreases the total cost of the loan. You can check the charges of your loan against property before availing a credit to learn about all the associated costs and select the best available option.

Several financial institutions and NBFCs offer such secured loans at an attractive interest rate. Bajaj Finserv is one such NBFC that provides Loan Against Property at a competitive interest rate and is easy to meet eligibility criteria.

Loan against property offer high-value loan amounts without any end-user restrictions. Few financial products can offer such high amounts at the loan against property interest rates, which are typically lower than interest rates of most other unsecured or secured loans.

They also offer balance transfer facilities, prolonged tenor of up to 20 years, and a substantial loan amount of up to Rs. 3.5 Crore, instant approval, online account access, and other lucrative benefits. 

Brief About Loan Against Property

Loan against property is a lucrative option as compared to personal loan due to the longer time period and attractive interest rates.

LAP loan is one of the cheapest ways to raise a significant amount of money for a large expense, such as children’s education, child’s marriage, medical expenses, and expansion of the business and many more other expenses can be covered.

Bajaj Finserv also brings you pre-approved offers that help to reduce the hassle of the application process and saves your time. These pre-approved offers are available on several financial products, including secured and unsecured credits such as business loans, personal loans, home loans, etc.

You are required to share some details like your name and phone number to check your pre-approved offer. 

Before you avail your term loan on property, consider the above points and analyse your requirements to determine the ideal tenor for your loan. Also, do make sure to pay your EMIs on time to avoid additional charges on your loan. 

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