What to consider when taking a loan against property?
A loan against property or a mortgage loan requires adequate planning. This is because you are pledging a valuable asset to raise finances. So, it is vital to be aware of all the factors that can affect your loan against property to make your borrowing experience easy and hassle-free. Here is everything you need to take into consideration when choosing this loan to finance your personal or business needs.
Get insurance to reduce risk
Choosing a mortgage insurance cover ensures protection and lowers the risk for both you and the lender. Lenders feel more confident in offering you a high-value sanction if you choose an insurance scheme. Also, getting a cover ensures that there is no burden on your family in case of unforeseen events.
Consider the tenor carefully
A shorter tenor will help you save money that you pay towards the loan’s interest; however, choosing a longer tenor lowers your EMIs. So, check your financial standing and pick your tenor wisely. Remember to consider your age when choosing your repayment timeline. Lenders will give you a sanction for a higher loan amount if you have a lengthy career path ahead of you as compared to someone nearing their retirement.
Research the market before you apply
In order to get the best deal, it is important to research potential lenders. Consider NBFCs like Bajaj Finserv for a Loan Against Property to get a substantial loan amount of Rs.1core to Rs.3.5 crore, based on whether you are a salaried professional or self-employed. This amount is sanctioned to you at a competitive interest rate. Pick a lender who also gives you value-added services like door-step pick-up and charges you the lower fees and related changes on your loan.
Renovate your old property to increase its value
Different lenders abide by different credit policies, which set an age limit for the property you can pledge. This means that if your property is too old, you may get a shorter tenor on your loan sanction, which obviously makes repayment a little heftier on your pocket. So, renovating your old property before applying for the loan to increase its value.
Meet the necessary criteria
It is important to check the loan against property eligibility criteria outlined by your chosen lender to increase your chances of approval. Also ensure that you collect and carefully submit all the necessary documents required for loan against property. You will also need to have all necessary title deeds of your property in order to mortgage it. Don’t forget to check your credit score and ensure it is good.
Have a regular income
Having a source of income assures your lender that you have the means to pay monthly EMIs on time, so ensure your bank statements prove this. Even when it comes to a secured loan like this one, lenders avoid applicants who have the potential to default on repayment.
Decide on which interest rate you want
While considering loan against property interest rates, it is important to choose between fixed and floating rates. You can then search accordingly for the lender that offers the best interest rate of your chosen type. If the current market rates are low, you can opt for fixed rates to make the most of nominal interest and if you think the rates are likely to fall, you can choose a floating rate.
Consider these factors and check the affordability of the loan with a loan against property EMI calculator before you apply. This will help you ace your application and enjoy a fruitful experience from application to sanction.
