Do you want to Opt for a Secured Loan?
Nothing could be secured other than a loan against property (LAP).To have a smooth journey with LAP you should know all in and out about it.
If you are new to the term LAP then no worries, you are at the right place. This article is a must-read for you. The article will help you to know all about LAP. We have some tips and advice on a loan against property which all applicants must know before applying for it.
As the name suggests loan against property or LAP is a type of loan which can be availed against a property. It is one of the most secured terms of the loan as the property of the owner is kept as collateral. Whether you are a business person or a salaried person you have a preowned property you can avail the loan against it. LAP is on-demand not because it is cheaper than a personal loan but it can be used for many purposes like higher education, setting up a business, for a personal tour, wedding, or for any unforeseen medical expenses. The interesting part is the applicant can occupy the property even after the loan is availed.
Here, we have enlisted a few tips and advice on a loan against property for you that you should be mindful of before applying for it. Let’s take a look!
- Property valuation: The amount of LAP is based on the current market value of the property and the value depends on the different factors like age, size, and location of the property. A high-valued property situated in a good location usually to be low at risk means there is a higher chance of getting the approval. But before deciding the loan amount the lender usually appraises the property. Therefore, it is very important for you to know your property’s current value just to ensure that you are getting the genuine amount against the property.
- Eligibility criteria: As the eligibility criteria differ from lender to lender it is always advisable to check the eligibility criteria prior to applying for the loan. It will increase the chance of getting approval and also reduce the processing time. It ensures that you get the desired amount of loan.
At Financeseva, we have very simple eligibility criteria which enhance the chance of getting a loan easily.
- Interest rate& hidden charges: This is very important to check the interest rate of the loan as it helps to determine the affordability. Along with the interest rate, it would be a wise decision for you to have a clear idea about any hidden charges because few lenders offer lower interest rates but may charge some extra fees. Also, you should compare various lenders' offerings to get the lowest interest amount.
- Loan tenure: The payment tenure of LAP is always longer than a personal loan.LAP usually has a longer tenure up to 15 years. The benefit of longer tenure is that it offers a lower EMI amount which increases EMI affordability. But you should also keep in mind that longer tenure means higher interest payment.
- Processing or prepayment charges: LAP requires processing charges like all other loans through the processing charges may vary from lender to lender. There is also a prepayment penalty applicable for many lenders. So, it is advisable to have a clear idea about all these extra charges and compare them before applying for the loan, so that you can get the best deal.
- CIBIL score: Last but not the least, CIBIL score plays an important role in approval sanction.CIBIL score is basically your repayment history, creditworthiness, and your current debts. Every lender will check the score before approving the loan. One more thing to remember that rejection of loans can further bring down your score.
To sum it up, a loan against property is the best option to opt for only if you are looking for a higher amount for longer tenure with low interest. It gives you greater flexibility and feasibility to end-use. Along with all the benefits mentioned above, you should always remember that if you default on repayment, your property will be transferred to the lender.
So, keeping all the above-mentioned tips in mind contact us today for the right mortgage loan. We at Financeseva, ensure you a hassle-free satisfactory customer experience for any kind of loan services.
Contact us now!