The right loan, from the right lender.

1. Work out your budget

Banks lend up to 90% of the property value for loans up to ₹30 lakh, 80% up to ₹75 lakh and 75% above that. The rest, plus stamp duty and registration, comes from your savings.

2. Check your eligibility

Lenders usually keep all your EMIs within about half of your take-home income, and want the loan repaid before you retire. A co-applicant's income can raise the amount.

3. Choose the lender, not just the rate

Compare the APR in the Key Fact Statement: it includes the processing fee and other charges. Ask whether the rate is floating and how it's linked to the benchmark.

4. Submit documents

KYC, income proof, bank statements and the property papers: the sale agreement, the title chain, the approved plan and, for an under-construction home, the builder's documents.

5. Legal and technical checks

The lender's lawyer checks the title and its engineer values the property. Problems found here are much easier to fix before you pay the seller in full.

6. Sanction and agreement

Read the sanction letter and KFS before you sign. Check the rate, the fees, any insurance added to the loan and the prepayment terms.

7. Disbursal

For a ready home, the money goes to the seller in one go. For one under construction, it's released in stages, and you pay interest only on the amount released until full EMIs begin.

Secured or unsecured?

Unsecured business loans need no property and are quicker, but cost more and are usually smaller. A loan against property, or a CC/OD limit secured by stock, costs less and can go higher.

What the bank reads

• ITR and financials for the last 2 to 3 years: profit, not just turnover
• GST returns, to confirm your sales
• Bank statements: average balance, cheque bounces and cash deposits
• Your CIBIL and your business's credit report
• Your existing loans, and how you repay them

Common reasons for a no

Low profit in the ITR, repeated cheque or EMI bounces, balances that fall to nearly zero, too many recent loan applications, or a business that's less than 2 to 3 years old.

Collateral-free routes

For micro and small enterprises, CGTMSE lets banks lend without collateral, now up to ₹10 crore. Smaller businesses can also look at Mudra loans of up to ₹20 lakh.

Before you apply

Keep your banking clean for six months, file returns on time, and ask for an amount your profits can repay. Our DSCR calculator shows you what the bank will see.

What a CC limit is

A cash credit limit is a revolving account for day-to-day business needs. You draw what you need, repay as sales come in, and pay interest only on the amount used, for the days you use it.

CC or OD?

A CC limit is usually secured by your stock and debtors. An OD limit is often secured by property or a fixed deposit. Day to day, both work the same way.

How big a limit?

For turnover up to ₹5 crore, many banks start from 20% of your projected annual turnover. Larger businesses are usually assessed on their working-capital cycle and projected balance sheet.

Drawing power

You can draw only up to your drawing power: stock minus creditors, plus debtors under 90 days, each after the bank's margin. File your monthly stock statement on time, or the bank may stop drawings.

Renewal

Limits are reviewed every year. Submit your financials, GST returns and stock statements before the due date. A limit that stays overdrawn, or isn't renewed in time, can turn the account irregular.

Getting an enhancement

Rising turnover, healthy credits in the account and on-time stock statements make the case. Ask before you hit the ceiling, not after.

It pays when

• The rate gap is meaningful, usually 0.5% or more
• Many years are left on the loan, since most of the interest is paid in the early years
• The fees on the new loan are small next to the saving

Ask your bank first

Your current lender may lower your rate for a small conversion fee. That's often cheaper and quicker than moving.

The costs of moving

Processing fee, legal and valuation charges, stamp duty on the new mortgage in some states, and any foreclosure charge on a fixed-rate loan. Floating-rate loans to individuals carry no foreclosure charge.

A top-up at the same time

Many lenders offer a top-up along with the transfer, usually at a lower rate than a personal loan.

How it works

Get a foreclosure letter and a list of your documents from your bank. The new lender sanctions the loan and pays off the old one. Then collect your original property papers from the old bank, which must return them within 30 days.

How much you can get

Lenders typically lend 50% to 70% of the market value, a little more against a home and less against commercial property, and they size it to your income too.

Who it suits

Business owners who need a larger amount or a longer tenure than an unsecured loan allows, or anyone replacing expensive debt with one cheaper loan.

What the lender checks

• A clear title, in your name or a co-owner's who joins the loan
• Approved construction and up-to-date property tax receipts
• Your income: ITR, financials and bank statements

The costs

Processing fee, legal and valuation charges and, in some states, stamp duty on the mortgage. Compare the APR, not just the rate.

The risk

Your property is the security. Borrow what your income can repay comfortably, and be clear about how you'll use the money, because lenders may ask.

What counts most

• Paying every EMI and card bill on time: one late payment can cost many points
• Using less than 30% of your card limits
• A mix of loans, repaid well over the years
• Few new loan applications in a short time

What doesn't hurt

Checking your own score, or an enquiry with an advisor like us. Only a lender's check after you formally apply counts as an enquiry.

Get your report

Every credit bureau gives you one free full credit report a year. Check it for loans that aren't yours, closed loans still shown as open, and late payments that are wrong.

Fix errors

Raise a dispute with the credit bureau online. It checks with the lender and corrects the record if the lender confirms the mistake.

How long it takes

Six to twelve months of clean payments make a visible difference. Settling a loan for less than you owe stays on your report as "settled" and worries lenders for years, so close loans in full wherever you can.