How is the loan to be repaid

A loan against property can be availed in two ways and based upon the manner in which this is taken the repayment will have to be done. When the loan is taken as a term loan it will be repaid in the normal way, like other loans. This means that there will be the regular equated monthly instalments (EMIs) for the time duration of the loan, and the loan will be repaid when the EMIs for the entire duration are paid back. There can also be a lump sum prepayment if the loan condition allows this, but this might come with a prepayment penalty. This is a fixed method that will ensure that a specific sum is repaid regularly to the bank by the borrower. On the other hand, when it comes to the overdraft form of the disbursement the amount can be paid back as and when the money is due. However, there is a specific time period at the end of which the balance has to be brought back to zero. In the intervening period the amount that is required can be used and the interest is charged accordingly. This gives a larger amount of flexibility to the borrower to undertake the necessary means to repay the loan.