A loan against property for doctors is a handy financial tool that can benefit a medical expert who is looking to expand his/her business operations. If you are a medical personnel who would like to apply for a loan against property for doctors, it would be good to know some features and benefits and follow some rules.
What is a loan against property for doctors and how does it work?
A loan against property for doctors is sanctioned against a property’s value which the borrower vows to secure the loan. Hence, a loan against property for doctors is a secured loan where the collateral or security is the property. A medical practitioner can avail a loan against property for doctors up to Rs.2 crore. However, how much amount is sanctioned depends on the value of the property. Lenders can allow 60-80% of pledged property value as a credit. For example, if your property is valued at Rs.50 lakh, you can avail an amount between Rs.30 lakh and Rs.40 lakh or more as per the lender’s terms and conditions. Now that you know what a Loan against property for doctors is - let’s provide you some basics rules to follow while applying for it.
Following the rules will help you manage it without landing in financial soup.
Rule 1 – Don’t borrow more than your capacity
Unless you want to keep paying EMIs for many years, don’t borrow more than your repayment competence. Make sure that your monthly EMIs are not exceeding 40-50% of your monthly taxable income. Why? If your liability eats up a significant part of your income, it may become difficult for you to manage other financial aspects of your life.
Rule 2 – Try to go for a shorter tenor
Loan against property for doctors comes with a tenor as high as 240 months which may tempt you to avail it and pay lesser EMIs. However, in the long run, you may have to cough up a higher interest when compared to the same which you would have paid while opting for a shorter tenor.
Rule 3 – Make it a point to make timely payments
If you don’t make timely EMI payments, you may face some EMI bouncing penalties. Also, a discrepancy in your repayment may also affect your credit score, making it difficult to avail another loan in future at an affordable rate.
Rule 4 – Always go through the terms and conditions
You may not have time since you are a doctor and may be busy with patients and other things. But, take out some time to read your loan against property for doctors terms and conditions so that you can control it and not lenders if there is a dispute in future.
Rule 5 – Avail insurance
Since a loan against property for doctors involves a huge amount, it would be prudent to avail an insurance against it. The insurance will help you reduce the burden in the event of unfortunate situations.
The Bottom Line
Now that you know the finer things associated with a loan against property for doctors, you are definitely in a better position to feel confident while applying for it. Good luck!