Even though most of us are cautious about saving a portion of our incomes routinely, there still can be moments when you need more funding than you currently have.
In such times, you will need a large corpus of funding, and often – immediately. Breaking the bank to dip into your savings is not always feasible, but you do have other fundraising options available at your disposal.
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We are not talking about personal loans, a go-to option for many who require funds with no end-use restrictions. While personal loans have enjoyed immense popularity, they aren’t celebrated for their cost sensitivity. These sanctions are unsecured, racking up a high interest rate and costing borrowers far more.
However, borrowing funds during an emergency does not necessarily have to be an expensive affair. Individuals who need sizeable sums to address personal expenses can also consider availing of a loan against property at far more nominal rates, as it is a secured loan sanction.
The current interest rate on loans against property starts from 8.60%* for eligible salaried and professional applicants, which is comparatively lower than that of a personal loan. The benefits don’t end there – individuals in need also get access to funds as high as Rs. 5 Crores, and even higher, depending on their eligibility. In contrast, personal loan sanctions typically go up to Rs. 25 Lakhs, at best. What’s more, similar to a personal loan, the loan against property sanction also has no end-use restrictions, making the deal all the more attractive.
Essentially, a loan against property is a versatile sanction with all the benefits of a personal loan but with more add-ons at a lower cost of borrowing.
Borrowing Tips for Loan Against Property Applicants
Availing of a loan against property is extremely easy and hassle-free for applicants these days, ensured by lenders’ easy eligibility criteria. The eligibility parameters lenders set are essential to sanctioning the loan sum, so the applicant’s profile is verified as low-risk and creditworthy.
To help you enhance your profile and application before you apply for a loan against property, we have a list of tips that borrowers should consider to augment their chances of speedy approval and disbursal – to address any financial need they may have. This exercise can help potential applicants avoid common mistakes while applying for a loan against property and make the process seamless.
- Compare and Analyse Lender Rates
Just as you have to match the lender’s eligibility criteria, you should also ensure that the lender’s offerings, primarily their loan against property interest rate, are in line with your needs. Finding a lender whose terms and policies are feasible for you will naturally ensure easy loan eligibility.
To aid in your research, you can use a Loan Against Property EMI Calculator that projects your tentative EMI payable based on the following factors:
- The principal amount
- The preferred repayment tenor
- The lender’s current loan against property interest rate
There is no cap on the number of times you calculate the result, so you can tweak the variables as per your wish and use it to compare various lender rates against your desired amount to see if the EMI payable is within reach. This will not only help you gauge if the lender is the right fit for your financing needs but will also help you prepare a rough repayment plan in advance.
- Choose the Tailored Repayment Options
Lenders offer flexible repayment options to eligible borrowers to help ease their repayment burden. Consider customising your repayment plan to match your financial goals and repayment capacity so your repayment journey is not tedious or hard to keep up with.
This not only relaxes your repayment obligation but also ensures that you are in no danger of delaying or defaulting on your EMI payment cycle.
Lenders offer up to 18 years to repay a loan against property, allowing borrowers to pay the amount at their own pace. Choose a tenor that emphasises savings and gives your affordable EMIs.
- Pay Close Attention to the Lending Terms
An important aspect that many applicants overlook is the lender-specific loan terms and policies that come along with the loan against property. While most of them are common, some might be important for you to make note of, including:
- Late fees
- Cheque bounce charges
- Part-prepayment and foreclosure charges
Closing Thoughts
Once you’re confident about your loan application, apply for a loan against property for terms you are suited for. Loans against property help borrowers address business expansion costs, educational expenses, and renovation costs, among other things – letting fund crunches be no bar to your dreams and needs.
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