When individuals need funds to meet urgent financial needs, the first thing they typically consider is a loan. Some individuals, however. People find it a tedious affair when it comes to deciding whether a loan against property is a good idea or which loan to apply for. While some of these concerns are often justified, experts recommend availing of a loan against property as it is one of the most secured types of loans. A loan against property has a low interest rate compared to other options. It permits borrowers to use the value locked up in a property while they continue to occupy the property in the loan period.
Top Three Factors That Determine Loan against Property Interest Rates
#1 CIBIL Score
One of the most essential factors that influence the loan against property interest rates and loan against property eligibility is the CIBIL score. Financial experts suggest maintaining a score equal to or higher than 750 to avail of a competitive loan against property interest rates. If a borrower’s credit score is low. Lenders can view the individual as a high-risk borrower and offer higher interest rates.
#2 The Property to be Mortgaged
The property to be mortgaged will determine the interest rate charged on a loan against the property. This indicates that lenders would be keen on knowing the type of property that has been pledged, its age, location, and condition. Besides, high-value buildings constructed in prime locations and excellent conditions are likely to fetch lower interest rates when compared to old and worn-out properties.
#3 Loan Against Property Duration
The loan tenor or duration for which an individual takes a loan against property is likely to impact the interest rate that is levied on it. A loan against property is typically a long-term commitment for which an individual needs to pay a fixed amount of money in the form of an EMI (principal loan amount + interest) each month. The shorter the loan tenor, the higher will be the EMI amount that the individual needs to pay. Lenders might charge a higher interest rate if they apply for a shorter loan tenor as opposed to a relatively long one.
Advantages of a Loan against Property
Hassle-Free Documentation Process
A borrower can make the most of quick and minimal documentation with a seamless application process for a loan against property. When applying for a loan against property online.
Quick Processing and Speedy Disbursal
Based on the borrower’s eligibility and documentation completion. Such a seamless process ensures that the borrower gets funds via a loan against property without waiting for long to use funds.
Balance Transfer Facility
A borrower can transfer an existing loan against property online with a new lender. The process will help eliminate a borrower’s high-cost debt. Based on one’s credibility and financial profile. A borrower can get the most appropriate property loan rates available in the market.
How to Apply for Loan against Property Online
The application process a borrower has to undergo to apply for a loan against property is simple and as follows:
Step 1: The borrower has to fill out an application form. This is usually available on the official website of the lending institution.
Step 2: The borrower has to respond when the lending institution’s executives get in touch with them for further queries. This may take at least 24 hours.
Step 3: The borrower is likely to be updated on the status of their loan against property application within approximately 48 hours of applying.
Step 4: Once approved, the borrower has to submit all documents requested by official representatives of the lending institution.
For both self-employed and salaried individuals. A loan against property is a boon as. It helps keep the hard-earned savings intact and comes with affordable EMIs and long tenors. Before opting for a property loan, however. A borrower needs to ensure that they are aware of all the essential aspects. This will help make informed decisions.