A mortgage loan is a secured loan that can be availed by mortgaging any immovable asset like residential or commercial property, piece of land, machinery etc. to the lender. This loan is a suitable alternative for those who do not wish to avail unsecured loans because of high interest rates. 


mortgage loan


Since a mortgage loan is secured against collateral, there are fewer risks associated. Accordingly, lenders provide higher loan amounts at competitive interest rates. Additionally, mortgage loans come with extended repayment tenors that enable borrowers to pay off the whole amount without sustaining financial strain. 

These loans have no end-use restrictions and can be used to meet several financial requirements, including – 

  1. Paying higher-education expenses in India or abroad
  2. Fund wedding expenses
  3. Consolidating debts
  4. Purchasing or construction or renovation of a house

However, the mortgage loan amount depends on the current value of the asset and loan to value ratio extended by the lender. 

Here are five things that you should know about mortgage loan before availing one – 


  • Eligibility criteria 


Before opting for a loan against property, one should check the eligibility criteria set by different lenders to see if they satisfy the conditions. A lender may decide to reject your loan application if you do not fulfil the eligibility conditions. 

Rejection of loan applications are recorded in your credit report, and too many rejections have a negative impact on a borrower’s credit rating. Additionally, you should also know how credit score affects your loan against property eligibility.

An applicant should meet the following eligibility criteria before availing a loan against property – 

  1. Borrowers must be a resident of India 
  2. Salaried applicants should be within the age of 33-58 and working in a reputed MNC, public or private sector.
  3. A self-employed individual should be between 25 – 70 years and have a steady source of income.


  • Documents required


Applicants should also furnish the proper documents while applying for a loan against property. They should keep the following list of documents handy – 

  1. Property documents
  2. Income proof – income tax returns, salary slips, bank account statements
  3. KYC documents, which include PAN, Aadhar card, voter ID, passport, driving license etc.
  • Fees

When you avail a mortgage loan, you have to pay certain associated costs. You should know about these charges in detail. Moreover, keep in mind that the fee amount varies from lender to lender. 

  1. Processing fees
  2. Statement charges
  3. Interest and principle statement charges
  4. Mortgage origination fees
  5. Mortgage EMI bounce charges
  6. Penalty interest

Apart from these charges, you also have to pay a fee if you foreclose or part-prepay your loan.

  • Mortgage loan interest rates – 

This is another crucial point that one should know about. There are two types of property loan interest rate – fixed and floating interest rates. Whereas the fixed interest rate stays the same throughout the loan tenor, the floating interest rate varies as per the market index. Aside from that, you should also keep in mind the factors that affect the interest rate for a lap.

  • Application process 

One can complete the loan application process online. To do so, go through the below-mentioned steps – 

  1. Go to your lender’s website and access the loan application form.
  2. Enter the required details in the application form and submit it.
  3. After submission, your loan will be approved subject to fulfilling all the eligibility criteria.
  4. Once your loan is approved, representatives will contact you to collect the necessary documents.
  5. The loan will be credited post document verification.

Several lending institutions in India also provide pre-approved offers to their existing customers. These offers aid an applicant to avail credit quickly and efficiently. Besides, mortgage loan, these offers can be availed on other secured loans such as home loan, property loan, etc. One can quickly check their pre-approved offers by providing their name and contact information.

Borrowers can also use online tools like mortgage loan EMI calculator to know their monthly liability from such a loan. Besides the EMI, the calculator also displays the total interest and the total amount payable. It enables an individual to adjust and plan loan repayment accordingly.