Life is full of uncertain events, and during this long journey of life, sometimes people fail to manage their finances. In such situations, availing of a loan by mortgaging commercial or residential property is the best way to get money at the time of a financial emergency.
It is the most expensive possession at risk. Though it is pretty widespread among the people, many people avail themselves of the loan without evaluating the different aspects of LAP or loan against property interest rate. They could not get the beneficiary offers of LAP.
Companies providing Housing Finance in India offer you some amazing deals on loan against property (LAP) if you do not want to miss any chances to get the same benefits, avoid making the following mistakes while applying.
Not sorting your pre-requisites
Availing of a loan after approval of a loan request is easy, but the major complication is the verification process of your loan. So, before you apply for LAP, check all the loan against property documents required and make sure that the documents are in a condition to increase your credit score. By doing so, the approval process will become smoother for you.
Being careless with their documents
The paperwork part is very crucial in any loan. As in a loan against property, the amount of loan and repayment tenure both are high, and not going through all the terms and conditions for a loan will create a huge obstacle in your loan approval. Be responsible for your required documents and go through the details of the loan against property.
No proper Research
While opting for any loan, research is a must to select the best interest rates, EMIs, and tenure for your loan. Do research in the property market for the best loan deals and make the right decisions. For example, if a bank offers you a long tenure for the given loan and you can pay it before time, you must go for it. By doing so, you will be able to reduce your loan against property interest rate, and you will also be able to save your funds in the form of FD.
Not taking the required time for a decision
In this busy world, everyone is forced to make quick decisions in their lives and loan matters. But the loan against property decisions is not something to make in haste. However, the banks and lenders may offer you some greed to make your decision of LAP instantly. Still, one should take proper time for the evaluation aspects of the finances and loans, such as better tenure, affordable interest rate and EMIs, etc. You can also seek the help of an online loan against property EMI calculator to estimate your monthly EMIs.
Show the accurate value of your property
You may think that showing the vaster market value of your property to your lenders and banks on a loan application will be a fruitful decision. But it is not as sensible as you assume. Before approving your loan, the lenders will visit your property and examine the precise value of your residential or commercial property because the given loan will be dependent on their land inspection. So it is better to show the real property with accurate market value. In case of wrong information, your application may get rejected by the lenders.
Clear all the fees and charges
Besides the loan, you are also supposed to pay some additional charges as part of your loan application. Read all the terms and conditions of banks and discuss all the extra charges of repayment or another penalty with your lender to avoid future hurdles. If your lender is charging this penalty, then you may have to pay a fine for repayment, submitting the EMIs beyond the limit, or paying the depth before the end of tenure.
Note your current financial status and your earning
This is the most significant part as the given amount should be proportional to your monthly salary. If you do not consider your present financial status, debts, and standing loans, you may fall into big trouble. If existing financial stress from the loans, credit cards, etc., may negatively affect your credit score. Also, it will create glitches for lenders to sanction your Loan against the property on time. It is advisable for you to understand your present financial status and get an exposure of your liabilities whether you are ready for another loan or not.
Loan against Property Eligibility
Before applying to the loan against property, one should get to know the eligibility criteria for the loan. If you are not eligible for the loan and fill the application form LAP, then the application form may get rejected by the lenders and banks in the middle of the process.
The loan against property is the most popular kind of loan in the country. But before availing of the loan, one should know the accurate loan against property interest rate as they are generally high in the case of LAP.