Getting money quickly when you need is not easy. Most people fall into the trap of costly loans that charge much higher interest rates. A loan against property accepts your idle asset (property) as collateral and approves a loan amount of up to 60% of the property’s current market value. But, do you know the best ways to make a loan more cost-effective? If your answer is ‘No’ or ‘Maybe’, this article is for you. Read on to find out.

You might be a skillful saver. You know how to maximize the returns from your investments. But, are you sure that your savings are enough to take care of the unexpected surprises life throws at you? 

The Basics of Loan Against Property

Before getting into the details of making a loan more cost-effective, let’s understand the basics.

A loan against property can be availed by any Indian citizen between 21 and 60, who is also a residential or commercial property owner. You can pledge a self-occupied, rented, or vacant property and get up to 60% of the property’s current market value. After getting the funds, you are free to use it in any way you like, except for speculative purposes. To avail a loan at attractive interest rates, you need to submit the required documents along with the application form. The maximum term of a loan is usually twenty years. The interest rates are generally in the range of 9.50% and 10.65%.   

The Best Ways to Make a Loan Against Property More Cost-Effective

Here are the steps you may take to avail a loan against property with the best interest rate.

Choose a Long-Term Loan Against Property

If you want to clear your loan early, you may reduce the loan term. A short-term loan has its advantages. Your loan against property interest rate will be lower, and you may become debt-free earlier. However, it can inflate your loan bills.  If you want to make the loan truly cost-effective, you should opt for a long-term loan. While a longer term may increase the loan interest rate a little, your effective EMI’s will be lesser. 

Aspire For a High CIBIL Score

CIBIL score is a crucial number for a borrower. You can expect the best loan against property interest rate if your score is on the other side of 800. If, however, your score is less than 800, you must take the steps required to improve the score. An excellent way is to avail a loan against propertyfrom PNB Housing Finance, which approves a loan even when the borrower’s credit score is below 100. After the loan gets approved and the repayment period starts, you can pay the EMIs on time and often prepay to increase your credit score. While it may take time, this is a sure-shot way to increase the CIBIL score.

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Include a Co-Applicant

Another way to get the bestloan against property interest rateis by adding a co-applicant in the loan application form. The co-applicant needs to be a joint-owner of the property and must have a stable income source. In the case of a joint loan, the lender evaluates both applicants’ income status and typically offers the bestloan against property interest rate.


A loan against property takes your worries away and provides you with much-needed funds. By repaying on time, you can increase your credit score and makes further loan applications simpler.

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