What should you look for when comparing Banks and NBFC’s for Loan against property
Category: Loan Against Property
When you have several properties, the best thing that you can use them for is to get loans against them to help your business or for your personal financial needs. Banks and institutions usually need something as collateral to ensure that the bank or the NBFC does not get cheated in case you default on your payments.
With loans against property, this is covered by you and the bank as you will be giving your property as collateral for the same. This is a very popular form of loan when it comes to banks as well as many of the NBFC’s. While this is common, you need to know that the interest rates that are offered by them can vary greatly. There are several criteria’s that you need to consider apart from the obvious loan against property interest rates comparison
Some of the NBFC’s that are in the country might have a slightly higher rate of interest as compared to the banks because they are comparatively smaller and work in lesser frequency than banks. They are also more flexible with the timelines of the loan, and you can personalize your loan more. This is not always possible with banks.
Some banks don’t ask for any kind of pre-payment charges, but almost all NBFC’s and other banks ask for up to 4% of the principal outstanding as the pre-payment charge, so be ready to pay the same no matter where you are planning to take your loan from.
This fee is collected by banks and NBFC’s and while it differs with each, the amount can go up to 2% of the loan amount taken by you along with the service tax that you must pay for the same. These are some of the things you need to consider before you fixate on a bank or an NBFC, because as hidden charges, you might not know how much you end up paying more in the end.