Essential Things to Consider Before You Apply for Loan Against Property

By Akshay Sharma April 24, 2020 Finance

Property is a great asset for investment purposes or attaining loan to meet your financial requirements. Loan against property offers great financial assistance to anyone short of money or not willing to liquidate their savings.

With the option to choose easy monthly instalments and repayment tenure according to your convenience, financial institutions help in availing the specific loan amount.

However, before you apply for a loan against property, you need to understand certain essential requirements to ease the process of application and simplification of loan repayment.

Find Our Your Property’s Value

Each property has its unique value according to its locality, size, age, builder’s reputations and available amenities. Therefore it is important to know the total value of property to attain specific loan amount when pledging it. If you have a high-value property, it will help you attain faster loan approval because lenders consider it low-risk while approving the loan.

Research Available Loan Options

With the availability of information on the internet, you can do extensive research to find out different loan options before applying. The research must also include three essential factors to formulate the loan, such as EMIs, repayment tenure and down payment. A research-based on these factors will help you choose an appropriate loan with an attractive interest rate.

Find Estimate Amount that you want to Borrow

If you don’t have an estimate of the amount you need to borrow, it becomes difficult to ask of a specific loan amount. So, it’s important to make a proper list of expenses you need the loan amount for. For instance, if you want loan amount to buy new office space, you need to calculate the price of the desired property while adding estimate cost of equipment required, interior’s cost, etc. After estimating the financial requirements, review all the details of your income and regular monthly expenses. It will give you clarity of your general finances and help you select a loan amount that caters to your financial needs.

Check the Eligibility Criteria and Documents Required

Before applying for a loan, you also need to check the loan against property eligibility criteria to fulfil your financial urgency. Once you are aware of this information, it will eliminate any chances of rejection while ensuring you get the desired loan amount without any hassle. If you match the exact criteria and submit all the documents required, your chances of approval enhance, as well as the speed of loan processing increase.

Look for Different Lenders and their Interest Rates

The rate of interest also plays an important role while determining your ability to repay and affordability for a loan against property. Therefore, before applying for a loan, it’s essential to review and compare different lenders and their rate of interest to help you choose the lower interest rate on loan against property. You must also look for flexible prepayment conditions to make the repayment process easier, faster and hassle-free. Also, see whether or not there are any hidden or extra charges, as some financial institutions may offer low-interest rates but can charge some other extra fees.

Check Other Services and Benefits Offered by Lender

Some lenders may even offer certain value-added services to enhance the value of your loan and thus, enquire about such services for improving the whole borrowing experience. Such services may include guidance to technicalities while buying property, assistance to find the right property and customised insurance schemes. If you are aware of these value-added services, you can get additional benefits while attaining loan against property. For instance, some lenders offer pre-approved offers on loan against property. This not only simplifies the loan approval procedure but also saves your time.

Keeping these factors in mind, you can apply for a loan against property to fulfil your financial needs while putting the obtained money to good use.