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6 Myths about Loan Against Property Busted

By Finserv MARKETS - Aug 5,2019
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Loan Against Property Myths

For most of our urgent financial needs, a personal loan is generally the best option. However, since these loans do not ask for a collateral against them and have minimal eligibility criteria, the amount that can be availed as a personal loan is less as compared to what can be availed from secured loans. In case you want considerably high funds, then taking a loan against property is a better option. But, most people refrain from availing such loans because of some misconceptions associated with it. However, there is no reason to worry. To assure you further on this, here are 6 myths busted on loan against property-

You can only get loans against residential property

Perhaps the most common misconception among most borrowers is that you can take a loan against property only on residential properties. However, that is not the case. You can take a loan against property for both, residential as well as commercial properties. Check out the types of properties against which you can avail a loan.

You need to have a high income to avail a loan against property

Contradictory to popular belief, you need not fall under the ‘high-income bracket’ to avail a loan against property. Most loan providers have a set income eligibility for salaried as well as self-employed individuals to avail this type of loans. However, as long as you can convince them of your loan repayment capability, it would not matter whether you earn a high income or not.

You have to pay high interest rates

Because of the sky-rocketing property prices these days and the subsequently high amount availed as a loan, most people believe that the interest rates on loan against property would also be high. However, one needs to understand that loan against property interest rates depend on a number of factors. These include the amount that needs to be borrowed, loan tenure, type of property, valuation of your property, etc. As a result, the interest offered by different loan providers differ. However, most loan providers allow a scope to negotiate the interest rates on loan against property depending on how good your credit score is and the valuation rate for the property.

You can’t use the property used for mortgage

Most borrowers fear that once they mortgage their property for availing a loan, they cannot use the property anymore. However, this is not true at all. Even after taking a loan against a particular property, the borrower can enjoy complete freedom to use it. Generally, the property that most borrowers pledge for a loan is their residing home or commercial shops that they use for doing their everyday business. At the time of taking a loan against such properties, they fear losing their home or shop. However, there is no need to worry. As long as the borrower does not default on his loan repayment EMIs, he/she can enjoy living in the house or use the shop, that is mortgaged with the loan provider.

The approval process is stringent

While availing a personal loan is extremely easy, these days, availing a loan against property is also not much of a hassle. As long as the borrower meets the loan against property eligibility criteria laid down by the respective loan provider, he/she can easily avail a loan. Moreover, most loan providers offer online application process, which makes it easier to assess your loan application and process your loan.

Availing a Bajaj Finserv Loan Against Property available on Finserv MARKETS, is easy, hassle free and has a fast online process.

You can avail a loan for the full value of the property

Most people think that loan against property can be availed for the entire property amount. However, no loan provider will grant you a loan for the full property value. A loan against property can only be availed for about 70%-90% of the property value. Thus, at the time of pledging his/her property, a borrower must keep this in mind.

­Urgent financial needs forcing you to take a loan against your property? Visit Finserv MARKETS today and browse through our several customized loan plans to fulfill all your financial needs. The Bajaj Finserv Loan Against Property comes with affordable interest rates and flexible repayment options for both salaried and self-employed individuals. With Finserv MARKETS, you also get facility of making part-prepayments on your Loan Against Property at nominal charges. To know more about the documents required and the eligibility criteria, visit today!

As long as the borrower does not default on his loan repayment EMIs, he/she can enjoy living in the house or use the shop, that is equitable mortgage with the loan provider.

“Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere”!


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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522