What would happen if you are in dire need of emergency funds and can avail only a meagreunsecured loan? Would you quit dreaming if you look forward to expanding your business but are not eligible for a business loan? Well, it is rightly said that when all doors are closed, another window opens out of nowhere! Financial institutions have a solution if you own a property and are still bogged down with accumulated medical bills, unpaid education fees, or business renovation expenses. This solution is none other than the loan against property.
Better still, you can use any property, owned by you, as collateral – your home, factory, land, rented house, shop, leased shop, office – anything that bears your name on it. However, while applying for a loan against property, remember that it is your property, something very close to your heart, that you are presenting as collateral. Furthermore, it is vital to know a few essential facts to avoid rejection of or delayed application. Read on to know a few points that you should remember before taking a loan against property.
Understand if you fit in
Although business loan eligibility varies with different financial institutions,it is crucial that you thoroughly read the eligibility criteria and check if you fit in. Such an initiative not only ensures clarity of financial decision but also saves time immensely. Do not place an application with a financial institution where you are unsure of your eligibility of availing a loan against property. For example, if your property is in a remote location, you need to ensure if it can be pledged as collateral at all. Apply where you match the eligibility criteria, and such a calculated move will enhance your chances of approval and expedite the disbursement process.
Check the value your property
Value your property – either way. Your property is, of course, priceless. However, it is crucial to ensure a professional and right valuation. The financial value of your property depends on a few vital factors like vintage, location, amenities offered, size, and the brand equity of the builder. It would be best if you stayed aware of the value so that you can avail the desired loan amount when you mortgage your property. Ideally, you are eligible to get approved for an amount equivalent to 65% of the property value. Furthermore, the correct valuation of your property is also essential because high-value properties are considered low-risk and, hence, attract favourable rates of interest.
Select your lender wisely
Involving too many cooks would only spoil the broth and waste time. A deep search into your credit records can enable lenders to track down the number of places where you have applied for the loan against property. If you apply for a loanagainst property at too many financial institutions, they may detect your desperateness for a loan and suspect your credibility. If you have an existing relationship with a financial institution, try looking for offers to avail better rates and more benefits. You are also advised not to submit more than one loan application with the selected lender. Multiple applications may trigger rejection.
Another reason for carefully selecting your lender is to find out the most affordable rate of interest and the most favourable tenure. Research well and choose the right lender for you. Numerous websites and blogs would help you compare the benefits of the loan against property offered by multiple financial institutions in the market. You can also check the reviews made by applicants and borrowers. Look out for offers with hidden and additional charges. A few financial institutions may offer lowinterest rates against additional fees.
The third reason for such well-researched selection is to find out the lender who provides value-added services with the loan against property. Services like the availability of a dedicated relationship manager, tailor-made insurance schemes, etc. boost the value of the loan. Always remember to ask for more and reap all benefits associated with the loan against property. Ensure that the loan you avail is an asset in the disguise of liability.
Borrow the amount you need
Plan, in advance, the amount you need to borrow. You can easily estimate the amount by listing the expenses that you would incur for utilising the loan fund. For example, you need to calculate the price of your property, while adding interior design costs, upholstery, furniture, etc. if you intend to utilise the amount to buy a new office space.After identifying your financial needs, prepare a budget involving your monthly expenses and income. This initiative would help you study your finances and estimate a loan amount that caters to your needs.
Avail pre-approved offers
Availpre-approved loanagainst property from financial institutions since such offers reduce the processing time by several hours. Wait till the hassle-free verification process gets completed before the application is approved and the sanctioned amount is credited to your account. If you need to apply for a loan against property, grab pre-approved offers to reap the benefits of a speedy verification process, which ensures faster approval and meets your financial needs at the nick of time.
It is high time that you grab the best loan against property offer and put your financial worries at bay! Remember the above points to make well-guided financial decisions and choose the best option for yourself. Put the fund to fair use, pay your bills, and realise your dreams.