Financial Blog

Avoid doltish mistakes, before going up for loan against property

posted on 2018-12-12 07:48:08 by Admin

Loan against property is the solution of all monetary problems. Planning a destination wedding for your child? Or planning to send your child abroad for higher education? Or want to renovate your home? All these desires you have, but cash is what you don’t have enough, no worries, Loan against property is there for you. It comes under the secured loan category where the borrower mortgages his property as collateral to the lender.

Loan against property is not just a piece of cake, it requires the borrower to have enough knowledge before applying as you are giving your property as collateral, if repayments is not done you might lose it. So make sure that the particular reason for which you are taking loan is worth. Also, before applying you should have the knowledge of the value of your property, as by having the particular knowledge you’ll be able to crack a better deal with the financial institutes or private banks which usually offers 75% of the property value or from public banks which generally offers around 65%of the property value.

Secondly, have the best comprehension of the rate of interests, as you’ll be able to decide upon the best offers provided by different bank. Try considering the fixed interest rate for the long run, as in floating; there are chances that the interest rate might change due to any circumstances. Also choose from that bank which will also provide you with a shorter tenure for your loan, as it will reduce your expense on interests and also help will help you to get debt free faster. But again don’t just rely fully on the interest rates; make a strategic plan regarding your repayment of the loan amount which you are willing to take. Check from the EMI calculators, the interest which you’ll pay yearly, and the EMI amount which you’ll be paying off monthly. Check with all these details in order to be less burdened after taking loan as you’ll be having its full knowledge.

Checking your eligibility is also another factor which you should consider. As you might think that since you are giving your deed as security then what is the need of eligibility check? Hence, eligibility check is very important for the lenders as they’ll only provide you loan if you are under the eligibility criteria. The banks generally look at your age, your income; your existing EMI’s which you are paying monthly, your repayment and credit history through your cibil report or credit report, and the property value as per the current market rates. Documents, such as age proof, income proof, address proof, as well as the document of your property etc will be required to prove the above statement to the banks. So make sure you have all these documents handy, in order to process your case faster. After documentation, make sure to read all the repayments clauses properly.

So, in order for opting for Loan against Property make sure you have these minimal details in your mind so that you can avoid making doltish mistakes and regret later.