Loan Against Property is a financial option that gives you the opportunity to borrow a large amount based on your property. It is especially beneficial for those who need money in a short time to meet their major financial needs. However, small mistakes made while taking this loan can cause major financial loss later.

If you are thinking of taking a loan on property, then it is very important to keep some important things in mind. A loan taken without proper planning and information can not only affect your financial situation, but it can also be difficult to repay. Here are 5 common mistakes that should be avoided at all costs while taking a loan on the property.

1. Not assessing the loan amount correctly

Many times people borrow the maximum amount based on their property, even if their need is less. Doing this increases the burden of EMI and can lead to financial crisis. Decide the loan amount according to your actual requirements.

2. Not comparing interest rates
The interest rate has a big impact on the total cost of the loan. Many people take loans from any bank or financial institution in a hurry. Always compare the interest rates offered by different banks and financial institutions and choose the most suitable option.

3. Choosing the wrong loan tenure
The loan tenure has a direct impact on your EMI and total payment. EMI is higher with a short-term loan, while the total payment of interest increases with a long-term loan. Select the appropriate tenure based on your income and financial situation.

4. Taking a loan without reading the fine print
Loan documents often contain such terms and conditions, which may cause problems later if you are not aware of them. Read all the terms and conditions like prepayment penalty, processing fees, and other charges carefully.

5. Ignoring the correct valuation of the property
It is important to have a correct valuation of your property before taking a loan. Wrong evaluation may reduce the loan amount and cause you to face additional financial troubles.

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