Factors That Affect Loan Against Property Tenor For Instant Approval
- Loan against property tenor affects your repayment strategy
- Salaried and self-employed people can apply for a loan against property
There’s no point fretting over a cash crunch or delaying crucial life decisions because of the lack of money. Taking a loan has become a reasonable option to fund emergencies. Whether you’re looking for finances to run your business or pay your child’s higher education fees, you could consider approaching a bank or financial institution for a loan.
You may be offered either a high-interest unsecured loan or a low-interest secured loan. If you’re looking for a large loan amount, you might want to consider the latter. Secured loans are given against a personal asset. One such secured loan is a Loan Against Property (LAP).
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What is a Loan Against Property?
As the name suggests, you have to mortgage your property (residential or commercial) as collateral to get a loan amount. Both banks and Non-Banking Financial Companies (NBFCs) provide loans against properties. The amount is sanctioned based on the value of your property.
Depending on the lender’s policies, you could claim a loan up to 75% of the total value of your property. Since this is a secured loan, the Interest Rates of a Loan Against Property in India is usually much lower than most loans. You also get the option of picking between floating interest rates and fixed interest rates. You can also take advantage of a relatively long loan against property tenor (up to 15 years) and pick your monthly EMI as per your convenience.
However, factors that affect loan against property tenor, include:
LAP Amount
The higher the loan amount, the longer will be the loan against property tenor. In such a case, the loan is spread for a longer tenor, giving you ample of time to repay it.
EMI
If you pick a long-term loan against property tenor, the EMI amount is reduced. This makes it easier to afford the EMI in your monthly budget.
Interest Rates
An extended loan against property tenor also affects the overall interest you pay for the loan. With each additional month, you shell out additional interest. However, you can opt for a short-term loan, where your EMI increases but the overall interest decreases. The tenor you choose can affect your repayment strategy.
Clear Debts before the Due Date
Any favourable activity in your credit history can improve your credit score. Pay your EMIs on time and improve your credit score by clearing debts before the due date. Pre paying the loan amount before the tenor ends indicates you are able to manage your debts well, eventually maximising your credit score. In a mortgage loan, you can pre pay your loan amount with zero or minimal charges.
Age
Your age, as a borrower, can also affect loan against property tenor. Younger applicants with regular and growing incomes are likely to receive a long-term EMI tenor. Financial institutions offer easy balance transfer facility with loans against properties.
With this facility, a customer can transfer the remaining loan amount to another lender who offers a low rate of interest against nominal charges. The property papers will stay with the new lender till complete repayment is done.
However, being older could change the length of your loan tenor, as your retirement could jeopardise your repayment capability. Having decided on your loan against property tenor, you’ll need a few essentials to apply for a loan against property.
In addition to the asset you are pledging as collateral, there will be some Loan Against Property Documents Required. This loan against property feature for unsalaried as well as salaried people. Depending on your category, the necessary paperwork might differ too. Here’s a list of documents you’ll need when applying for a loan against property.
Avoiding Multiple Credit Cards
Paying through credit is easy and convenient, but it can also be easily misused. Avoid multiple cards that could lower your credit score. Applying for multiple cards reveals credit hungry behaviour to lenders. Instead of making big-ticket purchases to fund your expenses, opt for a mortgage loan.
Getting a mortgage loan is simple. You can avail of an instant mortgage loan approval with minimal documentation, You can receive an approved loan within 72 hours.
Reducing Debt or Debt Consolidation
Revolving or outstanding debt on credit cards gradually decreases credit score, if repayments are not made on time. Why not consolidate them all together? Paying off debts dramatically improves your credit score. A mortgage loan with a high-value loan amount can help stabilise your credit score.
With real estate rates on the rise in metros, such as Mumbai, a home mortgage loan becomes an excellent option to reduce and eliminate debts. To know more, how you can pay your existing debts, click here.
Documents for Salaried Person
- Form: Loan against property application form
- Identity and residence proof: Aadhaar card, Passport, PAN card, driving license, voters ID, ration card, utility bills.
- Job proof: Employee certificate, job appointment letter, experience letter
- Income proof: Salary slip for the last 3 months, Form 16, bank statements of the previous six months
- Property ownership proof: Property documents, electricity bill, maintenance bill, sale deed
- Other documents: Passport size photograph, processing fee, property valuation report
Documents for Unsalaried Person (Self-Employed Professionals and Businesspersons)
- Form: Loan against property application form
- Identity and residence proof: Aadhaar card, Passport, PAN card, driving license, voters ID, ration card, utility bills.
- Business proof: Company registration licence, shop establishment act, tax registration copy
- Income proof: Income Tax Returns for three years, profit and loss account, audit report, balance sheet, bank statements of the last six months
- Property ownership proof: Property documents, electricity bill, maintenance bill, sale deed
- Other documents: Passport size photograph, processing fee, property valuation report
Conclusion
With your documents in place, you can apply for a quick loan against property from banks or NBFCs. Also you can choose for quick approval option with easy documentation and better loan facility. With these simple eligibility requirements, avail a Loan Against Property and take care of credit card bills. Such a loan can help the credit card holder keep his/her credit score healthy by repaying the debt in time.
