A 4-point Checklist before Signing up for a Loan Against PropertyPurchase & Refinance Mortgage LoansUpdated on Oct 18, 2018 View more like this | Visit India, UN | Contact Alisha Antil |
As loan against property is a secured loan it comes with a lower interest rate while offering you a high loan amount. While you may plan repayment in advance, there are also a few other things you must ensure before you avail this loan. Keeping these things in mind can not only help make your loan borrowing experience more affordable, but will also make it easier. So, look that the 4-point checklist that you must tick off before you sign any loan against property paperwork.
> Apply for Only as much as you Need
In many instances, the value of your property may cause lenders to offer you an amount that is much more than you actually require. As tempting as the offer may seem, avoid taking more than you need. This means that even if you think you may be able to repay the extra funds, only apply for the amount that you require. Applying for more than you need can often lead to a debt trap. If you wish to create a buffer of extra funds for unexpected expenses, choose a Flexi Hybrid facility on your loan to stay one step ahead at no extra cost.
A Flexi Hybrid Loan Against Property allows you to borrow multiple times as per your needs from your sanction. Here, you pay interest only on the amount you use, thus saving you from paying needless interest on the whole sum. You can also choose to pay interest-only EMIs and repay the principal at the end of the tenor to manage your cash flow better.
> Opt for Higher EMIs if Possible
While a loan against property offers you long tenors to repay your borrowed amount, you can financially benefit from a shorter tenor, which means higher EMIs. This is because while shortening your tenor, your borrowed amount is divided into fewer months thereby charging you with lesser interest. However, it is essential you ensure that you are choosing an EMI amount that you can faithfully pay each month without missing on your due date and without straining your monthly cash outflow.
Additional Read: 10 Factors Lenders Consider Before Approving Loan against Property
> Be Aware of terms in the Fine Print
While looking at an affordable deal may excite you, it is important that you do not get lost into skipping the procedure of reading the fine print. When you do not read the fine print, you aren’t fully aware of the terms and conditions and hidden charges, if any. This can lead to confusion and added expenses in the future. Additionally, choose a loan offering that charges you nominal fees for prepayment or part-prepayment to make it easier on yourself.
For instance, one can get Mortgage Loan up to Rs.1 crore for salaried individuals and up to Rs.3.5 crore for self-employed individuals. You can also benefit from simple loan against property eligibility criteria, nominal part-prepayment and prepayment fees and the Flexi Hybrid facility apart from no hidden fees or charges.
> Have Insurance on your Loan
A loan against property features a substantial loan amount. While you may have sound repayment plans in place, it is always wiser to secure your loan with insurance. This protects your family from bearing a heavy financial burden in case of any unforeseen circumstances. So, in order to be well prepared for the future opt for insurance for your loan against property.
Follow the above rules for a successful and stress-free loan experience.
> Apply for Only as much as you Need
In many instances, the value of your property may cause lenders to offer you an amount that is much more than you actually require. As tempting as the offer may seem, avoid taking more than you need. This means that even if you think you may be able to repay the extra funds, only apply for the amount that you require. Applying for more than you need can often lead to a debt trap. If you wish to create a buffer of extra funds for unexpected expenses, choose a Flexi Hybrid facility on your loan to stay one step ahead at no extra cost.
A Flexi Hybrid Loan Against Property allows you to borrow multiple times as per your needs from your sanction. Here, you pay interest only on the amount you use, thus saving you from paying needless interest on the whole sum. You can also choose to pay interest-only EMIs and repay the principal at the end of the tenor to manage your cash flow better.
> Opt for Higher EMIs if Possible
While a loan against property offers you long tenors to repay your borrowed amount, you can financially benefit from a shorter tenor, which means higher EMIs. This is because while shortening your tenor, your borrowed amount is divided into fewer months thereby charging you with lesser interest. However, it is essential you ensure that you are choosing an EMI amount that you can faithfully pay each month without missing on your due date and without straining your monthly cash outflow.
Additional Read: 10 Factors Lenders Consider Before Approving Loan against Property
> Be Aware of terms in the Fine Print
While looking at an affordable deal may excite you, it is important that you do not get lost into skipping the procedure of reading the fine print. When you do not read the fine print, you aren’t fully aware of the terms and conditions and hidden charges, if any. This can lead to confusion and added expenses in the future. Additionally, choose a loan offering that charges you nominal fees for prepayment or part-prepayment to make it easier on yourself.
For instance, one can get Mortgage Loan up to Rs.1 crore for salaried individuals and up to Rs.3.5 crore for self-employed individuals. You can also benefit from simple loan against property eligibility criteria, nominal part-prepayment and prepayment fees and the Flexi Hybrid facility apart from no hidden fees or charges.
> Have Insurance on your Loan
A loan against property features a substantial loan amount. While you may have sound repayment plans in place, it is always wiser to secure your loan with insurance. This protects your family from bearing a heavy financial burden in case of any unforeseen circumstances. So, in order to be well prepared for the future opt for insurance for your loan against property.
Follow the above rules for a successful and stress-free loan experience.
