Very often due to the lack of adequate knowledge, the applicant tends to grab the wrong lender with an expensive deal while opting for a loan against property. And as a consequence, the borrower ends up paying more financially and emotionally. But with careful research and understanding of the lending market, lenders and offers, one can grab a great deal which makes the loan less burdensome.
WHAT IS LOAN AGAINST PROPERTY?
Before opting for one, it is imperative to understand the basics of the loan product. A loan against property, also called as a mortgage loan is a secured loan wherein the borrower keeps any of his property (residential, commercial or industrial) as collateral and opts for a loan against it. The borrower can use the loan amount as per his jurisdiction but has to mention the end-use in the loan application form. It must be noted that loan against property is not a home loan and both are completely different loan products.
Here are five key mistakes which the borrower must avoid at all cost while opting for a loan against property.
- Choosing the lender without comparing the interest rates offeredNot comparing different loan providers is the silliest mistake one can do. Being smart and alert about what different lenders have on offer can result in grabbing the most covetable low-interest rate deal and better terms and conditions. Also, low-interest-rate would mean low monthly instalment. LoansJagat platform lets the borrower choose the lender by comparing their offerings under one roof.
2. Choosing the wrong long tenure
It is important to remember that loan tenure and loan interest outgoing are proportional to each other. Longer tenure means more interest will be paid whereas a shorter tenure will result in saving of some money which would have gone as interest. Thus it is important to opt for the loan tenure wisely. If you have the repayment ability, then opt for the same instead of choosing the offered longer loan tenure.
3. Not being thorough with the loan agreement
A loan agreement upholds all the key information about the loan offerings. Many borrowers do not go through the loan agreement and the mentioned terms and conditions. This is the biggest negligence any loan applicant be a party to.
4. Not taking credit score into consideration
Every lender considers the credit score of the borrowers before offering their loan. The credit score gives them a clear picture of the repayment history of the borrower and in spite of whether the loan product is a secured or an unsecured one, the lenders take it into consideration. A good score can result in a better interest rate deal and fast loan approval. Whereas a poor credit score may result in outright loan rejection.
5. Not keeping the documents handy
Documents related to property against which the loan is being taken must be updated and in the name of the applicant. The borrower must get the records in line before applying for the loan. The lenders take a considerable time to verify the property-related documents and if they are not in place at the time of loan application, then it would only result in an increase in the loan disbursal time.
Loan against property is a great way to channelize the locked funds in the form of property and utilise them to meet financial emergencies. One can apply for the loan against property either physically visiting the chosen lender at his branch or by accessing his digital platform.
The borrowers can also use the platform offered by Fintechs like LoansJagat which allows the applicants to compare different lenders on account of their offerings in terms of rate of interest, loan amount, loan tenure, foreclosure charges, processing fees and EMI. Based on his requirements, the borrower can choose the lender. One can also apply directly for the loan from their portal. From loan application to submission of documents all can be done under one roof. This is a simple, convenient and hassle-free process which can be done from the comfort of one’s home. Thus, apply for a loan against property to fund your personal and business requirements but don’t forget to keep the above-stated pointers in mind.