From business expansion to personal expenses such as your child’s education, medical emergencies, or a wedding, you can use a loan against property for any purpose. Lenders will issue a relatively larger amount on a loan with your property as collateral as compared to other types of loans, hence making this option a good choice when you need an amount that is running into crores.
When you are looking for a Loan Against Property in India with higher loan-to-value ratio, apply for it from Bajaj Finserv. You can avail a high loan amount up to Rs.1 crore as a salaried individual or up to Rs.3.5 crore in case you are self-employed. Further, you can choose a long and comfortable repayment tenors or options such as the Flexi facility to borrow as you need and pay interest only on the used amount.
While weighing and comparing the loan against property features offered by various lenders in the market, make time to assess certain factors to reduce the chances of your application getting rejected.
Consider these 5 variables before you apply for a loan against property.
Know the Loan-to-Value Ratio
While funding your personal or business requirements through the means of a loan against property, first understand the value of the asset that you plan to pledge. Whether you pledge a commercial property or a residential property, weigh the pros and cons of this financial decision. It is important to know the value of the property you are pledging. This will help you ascertain the sanction that you are eligible for according to the loan-to-value ratio of your preferred lender. Generally, the loan-to-value ratio is restricted to 50–60% of the property value.
Evaluate your Eligibility
Despite the fact that you will be pledging your property as collateral, you have to fulfil the loan against property eligibility criteria. To conform to the criteria, you should either be salaried or self-employed and between 33 to 58 years of age, residing in India with property in a city specified by your lender. Apart from the checking eligibility, you have to submit your lender’s loan against property documents required to complete the application. Common documents that you need to submit are salary slips, bank account statements, PAN card, address proof, Aadhaar card, IT returns and documents of the property you want to mortgage.
Look out for the Best Interest Rates
While applying for a loan against property, look out for the lenders like Bajaj Finserv that offer a competitive interest rate on your loan. You also have to choose between floating and fixed interest rates. To make an informed choice, keep an eye on the fluctuations of the market. Securing a nominal interest rate will help you choose a loan with a shorter loan against property tenor, thus reducing your expense on interest and help you get debt-free faster.
Plan your Expenses in Advance
Finding the best interest rate is not enough; you have to plan your repayment in advance and create a strategy in place to repay your borrowed sum. To check the total interest that you will pay on a loan against property, use a property loan calculator. Next, consider your monthly expenses and existing financial responsibilities to ensure repayment does not burden your monthly income and expenses. This will help you choose the right loan amount, tenor and lender.
Understand the Repayment Terms
Even though you may be in the hurry to avail a loan, read the repayment clauses and understand the fine print. It is important to know whether the lender is charging you an extra fee for foreclosure of your loan or for part-prepayment. This will also help you ensure that you are dealing with the right lender and find if there are any hidden charges. You may also be able to bag convenient facilities like the Flexi Hybrid facility by Bajaj Finserv that allows you to choose interest-only EMIs and repay the principal at the end of the tenor. This will help you reduce your monthly EMIs by up to 45%.
Factor these tips to ensure that you don’t make any rookie mistakes when pledging your valuable asset. Do remember to check your pre-approved offer before applying to expedite the borrowing procedure and enjoy instant and hassle-free approval.