Get an affordable interest rate on loan against property with these tips

Applying for a loan against property means that you can enjoy a large amount of approval at a lower rate. It is because it is a secured debt. 

However, if you want to get even a more affordable interest rate on loan against property, you can implement a few tips. 

Read on!

1. Maintain a CIBIL score 

Even though a loan against property is secured finance, you need to maintain a robust CIBIL score to get the approval at even a lower rate. Lenders consider a credit score of 750 or more the best one to enjoy a lower interest rate on loan against property. You can do that by paying your EMIs and other debts on time. 

2. Go for a smaller tenor 

A longer tenor may help you to pay reduced EMIs, but that also means managing a large interest rate amount. On the other hand, a smaller tenor may increase your EMI amount but save big on the interest rate on loan against property. Thus, you should choose a tenor matching best to your repayment capacity with enough savings. 

3. Shop around for the best deal with lowest possible interest rate 

Another easy way to enjoy an affordable interest rate on loan against property is to shop around. Once you compare all available loan against property deals online on a third party website, you can easily pick the best deal matching your needs and budget. 

Based on your eligibility and lender’s policies, you may get an amount of up to Rs.5 crores from top-ranked lenders in India. 

However, if you want to reduce or pay a lower interest rate on loan against property, you can follow one of the discussed tips. 

You can also get in touch with a known financial expert to help you out if you want to know about the practicality of each of the tips.   

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You Must Know About What is Loan Against Property?

The loan against property is one of the secured finances available in India and offered by leading banks and NBFCs in major cities. 

If you need a large amount to cover your different needs, you can keep your property as the collateral to do that. 

In this case, the loan is given against the value of your property. Most lenders may provide you with a loan value of up to 75-80% worth of your property. 

And the best part about it is that you can continue to live in the mortgaged property even after availing of the loan. The applicable rate of interest on the loan against property is affordable as its secured loan. 

When you apply for a loan against property, you don’t have to wait for the loan approval and funds disbursements. As per your creditor’s policies, it may be possible to get the approved loan value into your bank account within 72 hours. You can also manage your outlays by repaying the loan over a flexible tenor ranging up to 20 years. 

You can check out your loan against property eligibility by utilizing the eligibility calculator. The online tool is available on a lender’s website for free. Once you enter a few details, you will be able to know an estimated value that you can get. You can also learn how much loan EMI you need to pay per month over the tenor. It is possible to know about it using the loan against property EMI calculator. 

If you want to avail of a significant amount without any restrictions on usages, you can use your property to do that. The loan against property has emerged as a viable solution.  

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What are the factors that affect loan against property eligibility?

Potential borrowers need to fulfil all loan against property eligibility requirements to avail such credit without hassle.

Some of the factors that influence these eligibility are discussed below.

Factors affecting LAP eligibility

• Credit history

Credit history or CIBIL score is a crucial parameter that affects the LAP eligibility significantly. This factor substantiates a borrower’s repayment capability and creditworthiness. Most lending institutions give preference to individuals maintaining a 750+ CIBIL score. Hence, borrowers must clear any outstanding dues and practice timely repayment to improve eligibility.

• Applicant’s age

Age is another vital factor influencing Loan Against Property eligibility. A financial institution offers an affordable interest rate to young borrowers due to their repayment capability. The chances of loan rejection for the retired or aged applicant is relatively high.

• Income stability

Income stability and employment status are again vital for both salaried and self-employed loan applicant. Lenders affirm a borrower’s salary structure and association with the company to determine his/her repayment ability. 

• Property value

Financial institution weighs the mortgaged property’s value as an eligibility parameter. A LAP borrower is needed to submit all the authentic documents for the same. Ideally, a property positioned in the primary location surrounded by essential amenities holds a significant value. However, it should not be associated with legal turfs or illegal activities.

These are some factors that noticeably affects the loan against property eligibility. Hence, potential borrowers must try to improve their eligibility to make a hassle-free loan application.

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