How to Decide the Tenure of Your Loan Against Property?

A loan against property gives you a large sum of money, which can be used for any purpose that you feel like. In most cases, this is used to invest or expand a business or funding towards a new venture altogether. A loan against property in most cases has a very long tenure, making it easier for people to repay that loan. But if you have the resources to pay the LAP in a short time, it would be a much better and wiser decision as you will save on the interest being paid. Always use a “LAP EMI Calculator” to double-check your lender’s calculations.

You must understand the pros and cons of both Long and Short LAP Term.

Pros and Cons of both Long and Short LAP Term:

Short Tenure-

A LAP usually has a long period of repayment. It can be anything from 5 -15 years typically. You should formulate a repayment strategy in such a way that you can pay off your loan in the shortest time possible.

This might not be an option for many people, so one must consider whether they will pay larger EMIs and save on the loan's interest, or will they pay small EMIs and greater attention to the principal.

Long Tenur-

One main advantage of a more extended repayment period is that the EMI will be significantly lower than the short term. This means that you would be able to handle financial emergencies easily.

The only downside of this is that the interest that you would end up paying will be a lot more than that of a short term as the interest is calculated on a compounded basis.