Loan Against Property Myths You Must Ignore

Loan Against Property Myths You Must Ignore

A loan can help you to tide over an urgent financial crisis. It can also help you fulfil a precious dream, such as house construction or motor vehicle purchase.

However, not all loans provide the same benefits. And some, like loan against property, are more popular than others.

A loan against property is a one-stop financial solution for all your needs.

People use the loan amount in many ways. Some use it for house construction, higher education, or business expansion, while others use it for home renovation, vehicle purchase, or paying hospital bills.

Since a loan against property is one of the most popular loans, several myths surround it. This article lists the top myths surrounding loan against property and ways you can stay away from the negative information.

Myth-1: A High-Interest Loan is Better Than Mortgaging Your Property

While it is true that very few loans provide lower interest rates than a loan against property, some borrowers still prefer those loans over mortgaging their property.

However, if you repay the loan timely, nothing can be better than a loan against property. Since the loan amount you apply for will likely be high, even a difference of 1% in the interest rate can save you thousands of bucks.

Hence, a loan against property can be the best option when you want to usda loan rates get low-interest funds.

Myth-2: The Lender Stops You from Living in The Property

A common perception among new borrowers is that the lender stops you from living in the property once you mortgage it.

However, this is not true. You can apply for a loan against property by pledging a residential or commercial property.

Moreover, the property can be self-occupied, rented, or vacant. If the property is self-occupied, you can continue living in it. Similarly, if it is rented, the tenant does not need to vacate the property.

However, if you stop repaying the EMI, the lender may send you a legal notice and liquidate the property.

Myth-3: The Loan Amount Can Be 100% of The Property Value

Another misconception about a loan against property is that you can avail of a loan amount equal to 100% of the property value.

However, this is seldom the case. Most Indian lenders approve a loan amount of up to 60% of the property value.

Moreover, the effective loan amount depends on your eligibility, which includes credit score, income, age, property location, and loan term. You may use a loan against property calculator to calculate your eligibility and apply for the right loan amount.

Myth-4: Your Income Must Be High

You will often hear people saying that the minimum income criterion of a loan against property is high.

However, some lenders like PNB Housing Finance keep the minimum income criteria low to encourage people to apply for loans.

Any Indian citizen with a monthly income of above INR 15,000 can apply for a loan against property. Hence, you can also apply for a loan against property when your income is low but stable.


Since a loan against property interest rates is among the lowest, any property owner can apply for the loan. You may contact a reputed lender like PNB Housing Finance for clarifying all doubts.

Alternatively, you may visit their website to find answers to frequently asked questions. Investing a little time now can save you from future hassles.

Sneha Shukla

Hello, This is Sneha and I am the owner of Thank you for visiting our site. Here I am creating this site only focusing to help people, also, I have 4 years' experience in this field. for quality, information stay connected with our site. Thank you

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