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Consolidate Your Debts by Availing of a Loan Against Property

Consolidating multiple debts using a loan against property or mortgage loan opens a new line of credit that allows an individual to obtain a sizable loan amount by keeping their immovable asset as a mortgage.

Debt consolidation is a credit instrument where the borrower can obtain a sizable loan amount to close other ongoing credits. Availing of big or small credits has become a common practice to fund expenses during a financial crisis. Nevertheless, repaying multiple EMIs can become a hassle. Further, paying instalments to debts with a high-interest rate can be a costly affair.

In such circumstances, one can opt for a loan against property to consolidate the other debts. Keep reading to know more about the same.

How Can a Loan Against Property Help in Debt Consolidation

Consolidating multiple debts using a loan against property or mortgage loan opens a new line of credit that allows an individual to obtain a sizable loan amount by keeping their immovable asset as a mortgage. This means that one can clear high debts using this credit instrument. Multiple ongoing credit obligations may incur high-interest amounts as the lender charges each unit separately. However, opting for a LAP allows the borrower to repay the debts using the sanctioned fund and keep the total interest within an affordable range.

Remember the following pointers when planning to consolidate your active debts:

  1. Assess the actual outstanding debt

  2. Select the best loan option

  3. Check your credit score

How to Apply for a Loan Against Property in India?

Those wanting to consolidate their ongoing debts can apply for a loan against property by following these simple steps:

Step 1: Visit the official portal of their preferred lending partner.

Step 2: Then, they need to fill up the application form for LAP and produce the documents asked by the lender.

Step 3: After successfully completing the above mentioned steps, the lending partner will verify the documents and sanction the loan amount.

Further, willing applicants should also know the loan against property eligibility criteria to ensure a hassle-free loan application process. The basic eligibility parameters for a mortgage loan are as follows:

  • The applicant must be a resident of India.

  • The individual must be between 23 to 62 years of age (salaried borrowers) or 25 to 75 years old (self-employed borrowers).

  • Working experience of at least three years in the private or public sector or any MNC (salaried borrowers).

  • Proof of steady business (self-employed borrowers).

Documents required to opt for a loan against property are as follows:

  • Address proof

  • IT returns

  • Original documents of the mortgaged property

  • PAN card

  • Identify proof

  • Bank account statement for the last three months

  • Salary slips

  • Form 60 (for salaried individuals)

Benefits of Opting for a Loan Against Property

A loan against property comes with several features and benefits. Some of which are as follows:

  • High loan quantum

Due to its low-risk factor, financial institutions generally sanction a high loan amount. The loan amount can be as high as 70% to 75% of the property’s current market value, though this sum depends on several related factors. However, one should keep in mind to borrow as much as they require and spend the amount prudently to avoid credit defaults throughout the repayment tenure.

  • Low interest rates

Being a secured loan, the loan against property interest rates are quite low when compared to other credit facilities. This allows individuals to pay less on their monthly instalments and manage their expenses without financial burden.

  • Long loan repayment tenure

One of the most beneficial aspects of a loan against property is the long repayment tenure. This is because choosing longer repayment tenure reduces the borrower's monthly obligations. However, one should remember that opting for a long tenure increases the total payable interest. Hence, prospective loan against property applicants should consider this and make an informed decision accordingly to ensure a smooth borrowing experience.



Debt consolidation is a credit instrument where the borrower can obtain a sizable loan amount to close other ongoing credits. Availing of big or small credits has become a common practice to fund expenses during a financial crisis. Nevertheless, repaying multiple EMIs can become a hassle. Further, paying instalments to debts with a high-interest rate can be a costly affair.

In such circumstances, one can opt for a loan against property to consolidate the other debts. Keep reading to know more about the same.

How Can a Loan Against Property Help in Debt Consolidation Consolidating multiple debts using a loan against property or mortgage loan opens a new line of credit that allows an individual to obtain a sizable loan amount by keeping their immovable asset as a mortgage. This means that one can clear high debts using this credit instrument. Multiple ongoing credit obligations may incur high-interest amounts as the lender charges each unit separately. However, opting for a LAP allows the borrower to repay the debts using the sanctioned fund and keep the total interest within an affordable range.

Remember the following pointers when planning to consolidate your active debts:

  1. Assess the actual outstanding debt

  2. Select the best loan option

  3. Check your credit score

How to Apply for a Loan Against Property in India? Those wanting to consolidate their ongoing debts can apply for a loan against property by following these simple steps: Step 1: Visit the official portal of their preferred lending parter. Step 2: Then, they need to fill up the application form for LAP and produce the documents asked by the lender. Step 3: After successfully completing the above mentioned steps, the lending partner will verify the documents and sanction the loan amount. Further, willing applicants should also know the loan against property eligibility criteria to ensure a hassle-free loan application process. The basic eligibility parameters for a mortgage loan are as follows:

  • The applicant must be a resident of India.

  • The individual must be between 23 to 62 years of age (salaried borrowers) or 25 to 75 years old (self-employed borrowers).

  • Working experience of at least three years in the private or public sector or any MNC (salaried borrowers).

  • Proof of steady business (self-employed borrowers).

Documents required to opt for a loan against property are as follows:

  • Address proof

  • IT returns

  • Original documents of the mortgaged property

  • PAN card

  • Identify proof

  • Bank account statement for the last three months

  • Salary slips

  • Form 60 (for salaried individuals)

Benefits of Opting for a Loan Against Property A loan against property comes with several features and benefits. Some of which are as follows:

  • High loan quantum

Due to its low-risk factor, financial institutions generally sanction a high loan amount. The loan amount can be as high as 70% to 75% of the property’s current market value, though this sum depends on several related factors. However, one should keep in mind to borrow as much as they require and spend the amount prudently to avoid credit defaults throughout the repayment tenure.

  • Low interest rates

Being a secured loan, the loan against property interest rates are quite low when compared to other credit facilities. This allows individuals to pay less on their monthly instalments and manage their expenses without financial burden.

  • Long loan repayment tenure

One of the most beneficial aspects of a loan against property is the long repayment tenure. This is because choosing longer repayment tenure reduces the borrower's monthly obligations. However, one should remember that opting for a long tenure increases the total payable interest. Hence, prospective loan against property applicants should consider this and make an informed decision accordingly to ensure a smooth borrowing experience.

  • Tax benefits on the paid interest

A borrower can enjoy tax benefits on the interest paid for a loan against property. Nevertheless, one should remember that these benefits can only be applied if one uses the loan amount for specific purposes. An individual can claim tax benefits under Section 37(1) and 24(B) of the Income Tax Act on the interest paid for a LAP. Both old and new borrowers should consider claiming these tax benefits in order to maximise their savings and manage their finances in a better way.

  • No end-to-end usage restriction

The financial institutions in India sanction this credit facility without any obligation or restrictions. This means that the borrower can use the obtained amount to find their personal or professional expenses, such as home purchases, renovation, overseas education, wedding decorations, debt consolidation, etc. Borrowers can fund these significant expenses with ease by opting for a loan against property. That being said, borrowers should also consider using the loan against property EMI calculator to know their monthly obligations before applying for this credit facility. Several financial institutions in our country offer this online customised tool which is free to use for all users. One needs to enter their required loan amount, interest rate as charged by the lender and the desired repayment tenure. Further, a candidate can adjust these variables as many times as they want until they get their desired result. This helps them keep their monthly expenses on track and avoid unnecessary financial burden throughout the repayment tenure. To sum it up, a loan against property or mortgage loan can be one of the best credit instruments for debt consolidation. However, while opting for this loan, one should ensure to borrow what he/she actually requires and spend the amount prudently. This is because the lender holds the right to dispose of the mortgaged property and recover the unpaid dues in case of any credit default. Further, while deciding on the lender, one must make sure to compare different lenders and settle for the one that offers the maximum benefits and flexible terms.


Courtesy - Zee News

Link - https://zeenews.india.com/india/consolidate-your-debts-by-availing-of-a-loan-against-property-2513102.html

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