• Things to take care while planning to take loan against property

I have a B khata property in Bangalore. I am planning to take Working Capital for my business by keeping my workshop( B khata property ) as Collateral. Since its a B Khata property, Banks are not giving loans. A leading & stock market-listed NBFC is ready to give me a loan. 
I would like to know the major things one should be aware of while taking loan from NBFC, as the reviews of this company says ..unethical, blood-sucking, hidden charges, rowdies etc. I am forced to take loan as my business has been bad for a few months & I hope the market might improve in future
Asked 2 years ago in Property Law
Religion: Other

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9 Answers

Get agreement for taking loan vetted by a lawyer 


2) check the clauses regarding rate of interest to be charged , penal interest etc 

3) if you default in repayment company may dispatch recovery agents to recover the loan 


4) your property can be auctioned to recover the loan amount

Ajay Sethi
Advocate, Mumbai
94965 Answers
7576 Consultations

5.0 on 5.0

It would be suicidal if you proceed to avail loan from the company whose review is very adverse as what you have stated.

Any amount of precautionary measures taken by you may not be of any avail if the company decides to suck your blood in case of even small default in paying the interest amount too.

Therefore it is advisable to keep away from getting trapped into such death wells.

You will not be having any option than to sign the papers that are given to you if you have to avail the loan amount, hence any suggestion given to you in this regard would be of no avail to you.


T Kalaiselvan
Advocate, Vellore
85166 Answers
2222 Consultations

5.0 on 5.0

Many a debtors ruined themselves by falling into trap of such loan sharks. There is no way you can protect yourself. Taking any loan from such lender is not at all advisable

Ravi Shinde
Advocate, Hyderabad
4068 Answers
42 Consultations

5.0 on 5.0

Only make the right choice of collateral before NBFC. 

Prashant Nayak
Advocate, Mumbai
32093 Answers
183 Consultations

4.1 on 5.0

Hi, it is better you can contact, HDFC Bank, Axis Bank or other private banks they can offered loan on B-Katha property. 

Pradeep Bharathipura
Advocate, Bangalore
5604 Answers
336 Consultations

4.5 on 5.0

Yes, not all the NBFCs are above board, as they are not so strictly regulated by RBI as banks. One has to be careful in dealing with them. There are complaints in the media about the unethical practices they resort to.

Swaminathan Neelakantan
Advocate, Coimbatore
2823 Answers
20 Consultations

4.9 on 5.0


Things one should be aware of while taking loan from a Non-Banking Financial Company - NBFC are:-

  1. They have high interest rates. 
  2. They will profit from you by imposing various fines. 
  3. They will misuse your security cheques by filing cheque bounce cases. 
  4. They will make sure that you don't repay your loan amount so they can forcefully acquire your property. 

Things one should be aware of in respect to an immovable property:-

  1. Land on this earth is land, whether considered to be A or B type in the records of a government. 
  2. No capital can compensate the facilities you lose by giving away your land unless you buy another land in place of it. 
  3. B khata property can be converted into A khata property by proper legal procedure. 


Ankit Gautam
Advocate, Mohali
1 Answer

Not rated

- The Loan agreement should be verified by a lawyer or a person who having banking and financial knowledge. 

- Compare the rate of interest with other financial institutions , and also fixed it for entire period. 

- Before taking loan , check your financial ability to refund the same , otherwise in case of not refund , you may loose your property. 

- Take certified copy from the Registrar before submitting the documents to the bank

Mohammed Shahzad
Advocate, Delhi
13377 Answers
199 Consultations

5.0 on 5.0

Dear Client, 

                       You should check that the EMI is affordable and the loan is short term loan. In case if your loan is big amount then make sure you have insurance for it.You may also transfer loans or switch lenders if needed.Borrow amount you can surely repay and make regular repayments.You may also try to keep as much family member as possible informed about the loan processes.

Thanks & Regards

Anik Miu
Advocate, Bangalore
9028 Answers
110 Consultations

4.7 on 5.0

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