Finance

Avail of Property Loan: How to Avail of a Property Loan Easily

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Property loans or loans against property are loans that borrowers can secure by pledging a residential or commercial property or land as security or collateral. These high-value and low-interest loans are preferred, primarily due to end-use flexibility. Borrowers can use them for home remodelling, business expansion, and debt consolidation. 

Further, the LTV ratio for these loans can go as high as 70% for residential properties and 60% for commercial properties, which essentially makes loans against property one of the only financing tools that give borrowers access to substantial funds at low interest rates and that too quite quickly. If you want to avail of a property loan, read this brief guide that explains the LAP loan meaning, walks you through the procedure to obtain a property loan and discusses the several things that you must keep in mind to crack the best property loan interest rate deal. 

Property Loan: Application Process 

To avail of property loan, start by doing market research and finding the right lender for you. From banks and NBFCs to private lenders, many vendors operate within this space. Therefore, finding the right loan partner, one who is willing to sanction you a loan amount that you need and aligns with your mortgage loan eligibility and who is also willing to negotiate on the home loan interest rates with you is important. Doing so will require time and effort on your part. However, having the right lender by your side also makes the loan journey smooth and hassle-free. So, loans against property applicants must always find the time to do proper research. 

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Once you know the lender you want to work with, make either an online or offline loan against the property application. Submit all the required documents and wait for the lender to get back. Lenders negotiate on the loan terms and conditions only after they have successfully verified the documents submitted by you as well as the property you plan to pledge as security. 

Once you pass the document and property verification stages, which usually take a few days, your lender will connect with you to discuss the loan terms and conditions. It is now that you negotiate hard and try to reach a middle ground. Once the negotiations are over, the lender will draw a final loan against the property agreement. Visit your lender’s office to sign the agreement and wait for the loan amount to be disbursed into your account. 

Loan Against Property: Simple Tips to Get Approved Easily and Secure a Low Property Loan Interest Rate 

If you want to navigate the property loan application process quickly and smoothly, keep all the loan against property documents required ready with you. More importantly, make sure to have a CIBIL score in the range of 750 to 900. A high CIBIL score indicates judicious use of credit and a responsible attitude towards its repayment. It also indicates a low dependency on credit. Consequently, people with a good or excellent CIBIL score are extended loans quickly and on the best loan terms and conditions. 

Securing the best interest rates on a property loan also becomes easier when one applies for a loan amount they qualify for. Mortgage loan eligibility refers to a fixed set of criteria against which loan borrowers judge loan applicants and their repayment capacity. Mortgage loan eligibility calculators are online tools that tell loan applicants the loan amount they can get approved for based on inputs, such as age, income, current existing obligations, the current market value of the property, etc. Apply for a loan amount that you qualify for to enhance your negotiating power. 

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More importantly, opt for a low LTV ratio loan. A low LTV ratio loan is a loan where the loan amount availed of is low when compared to the fair value of the property. Low LTV ratio loans are easier to pay due to low and affordable EMIs. Further, low LTV ratio loans also indicate low dependency on credit. Therefore, people who apply for a low LTV ratio loan are extended loans at the best loan terms and conditions. The same stands true for people with low FOIR or those dedicating only a small percentage of their income towards the repayment of debt. 

To conclude, a property loan or loan against property can help you immensely. However, these loans also require you to pledge a property you own as security and therefore, one must avail of property loans only when one can comfortably pay the ensuing EMIs. 

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