LENDERS may be falling over themselves to extend home loans. Getting a loan, however, will fulfil only 85% of your requirement, as banks are not allowed to fund 100% of the property's value. The 85% limit is placed to ensure that the borrower has a substantial stake in the house. It also ensures that even if property prices crash, the lender has adequate security against the loan. This condition, though, may pose difficulties for borrowers - particularly young buyers with decent salaries, but inadequate savings to make a down payment. While they can consider taking additional loans, they should ensure that they can afford the EMIs of both the loans. The thumb rule is that a young individual's EMI outgo should not exceed 50-65% of the gross income.

Also, remember that taking a personal loan affects your home loan repayment capacity. Mortgage lenders consider your loan eligibility based on your repayment capacity. A number of factors are taken into account when assessing the repayment capacity, such as income, age, qualifications, work experience, the number of dependents, job profile, spouse's income (if any), assets, liabilities (which include personal loans), continuity of occupation and savings history. One route is to borrow against liquid assets as they come at a cheaper cost compared to personal loans and credit cards.

This could be the best option, particularly if the life insurance company lends the amount, in which case you stand to benefit on two counts - the relatively low interest rate and a convenient repayment schedule. However, you can borrow only against endowment policies, and not term or unit-linked plans. LIC allows you to borrow up to 90% of the surrender value of the policy, for which, you will be charged an interest of 9%, to be paid half-yearly. Else, you can choose to let the loan amount be deducted at the time of claim payments. Alternatively, you can raise a loan by pledging your insurance policy with a bank. In either case, in the event of your demise, the benefits repay the loan outstanding and any surplus leftover is paid to your nominees.

If you do not wish to liquidate your investments in equity shares, mutual funds, fixed deposits, national savings certificates, etc, you can consider borrowing against the same. Typically, the loan amount does not exceed 50% of the securities' valuation. "Pledging of shares can be considered if one is not keen on selling shares due to market conditions or expectation of better returns. This is because if the market falls, there would be pressure to close a part of the loan to take care of banks' margin requirements," advises Anil Rego, CEO of financial planning firm, Right Horizons.

One of the most commonly-owned asset in the country, gold jewellery can come in handy during times like these. Available for tenures between six and 12 months, the processing for this category of loans is relatively hassle-free. Banks like HDFC provide loan up to 80% of the ornaments' value, or Rs 10 lakh.

While withdrawing from your provident fund and public provident fund can be considered, you need to remember that doing so will set back the entire process of retirement planning, or providing for children's education. PF withdrawals (even within five years' continuous employment) will not attract tax if the purpose is house purchase. This apart, you can also avail of a loan on your PF. To dip into your PPF, you need to have maintained it for at least seven years. You are allowed to make one withdrawal - 50% of your PPF balance at the end of the fourth preceding financial year - every year from the seventh year onwards.

Most employers provide low-cost loans in the form of advances. Besides this, several employers include LTA as a part of cost to the company and are open to making a taxable cash payment.

Being unsecured loans, they come with exorbitant interest rates (up to 40% in case of credit cards), and hence, are not advisable, particularly if you are seeking a high-value loan of over Rs 50 lakh. For small-ticket loans too, you should consider exercising this option only if you are expecting any fund inflow, which can be used to completely repay the unsecured debt in the near future.