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ESG
A loan against property is a convenient solution to meet your financial needs if you own a property. By mortgaging your property, you can secure a loan based on its value while continuing to use it. A property loan offers the following benefits -
- Considerable funding
- Long-term repayment tenure
- Affordable interest rates
Moreover, there are two borrowing options: term loan and dropline overdraft. Let’s understand what they are, and which offers the loan against property at the lowest interest rates.
What is a term loan?
A term loan is a basic form of loan against property in which you pay fixed equated monthly instalments (EMIs) over a chosen repayment tenure. The mortgage loan interest is charged on the total outstanding amount.
What is a dropline overdraft?
A dropline overdraft offers you a pre-approved line of credit. You can make multiple withdrawals up to the sanctioned credit limit. The limit is reduced every month till the end of the loan tenure. Interest is charged only on the amount you borrow, not on the sanctioned credit limit. You can make flexible repayments towards the outstanding debt and reduce your liability.
Which is better?
To determine which option suits you better, let's explore the pros and cons of each.
Pros and cons of term loans -
Pros |
Cons |
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Pros and cons of dropline overdraft -
Pros |
Cons |
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Which one to choose?
The choice depends on your financial needs and preferences. If the interest factor is your primary consideration, the overdraft facility typically offers the lowest interest rates for a loan against property. However, if you need a higher loan amount and don’t mind fixed EMIs, term loans can also be a good choice.
Assess your needs to make an informed choice. IDFC FIRST Bank Loan Against Property offers both borrowing options, making it a versatile financing solution. You can secure a loan against property of up to ₹15 crores for up to 25 years, all at competitive property loan interest rates.
Term loan or overdraft, make your choice, and apply now to easily fulfil your financial needs.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.