The loan against property (LAP) is one of the quickest ways to arrange some urgent money for your different requirements.
Since the collateral is your own home that you take the loan against, there are lesser formalities and the higher amount that you can get.
Yes, be it funding your child’s higher or overseas education, starting a business or expanding it, for marriage’s funds or any other, the LAP works the best for you.
Since the collateral is nothing but your home, you can expect to grab a lower Mortgage Loan Interest Rates from your lender. If you have the required loan against property eligibility, you can easily get a higher loan amount of up to Rs.1 crore.
However, when you go out to avail a loan against property, you need to consider some factors so that you can manage the loan easily. This post will help you get some inputs on it:
Take an Insurance Against your Loan
The best thing while availing the LAP will be opting for a coverage against the loan so that it can offer the repayment in case if you fail to make it on your own. Having an insurance will also save you from getting your home sold by the lender in the case of a non-repayment within the tenor. Most of the lenders will offer the insurance at the time of applying for the LAP and you ought to have it to keep your home protected.
Want to get a loan against property eligibility for a higher amount? You can opt for a longer tenor so as to get an eligibility for a higher amount as lenders prefer people applying for a longer tenor. However, opting for a shorter tenor will help you pay off the loan quickly and also save some money on the compounding interest payment for having a longer tenor.
Shop Around for the Best Deal
Getting a LAP is no more a headache because if you meet the eligibility, a lender approves the amount super quick. However, with competition among online lenders soaring to offer the customer with a better loan against property interest rate, you should compare all deals first. Once you compare all deals online at a third party website, you can opt for a lender offer a lower loan against property interest rate and save huge. Hence, don’t forget to compare all deals online so as to pocket the best.
The Age of the Property
This is simple to understand – if the age of your property is 10 years and if the maximum age limit of the property allowed is 20 years, then the tenor of the loan can’t go beyond 10 years. If your building is home and if you have undertaken renovations recently then it may have a positive effect on your home application.
Choose between a Fixed and Variable Interest Rate
The loan against property interest rate will have two types – fixed and variable interest rate. For choosing the fixed one, you can pay a fixed amount as the EMI if your income is decent. You can opt for a variable rate if you are earning higher and want to enjoy the fluctuating EMI payment as per the market conditions.