Monetary/Financial problems can be tough to deal with. It’s not just about the numbers in the account statement), but about the impact they have on our lives. Sometimes unexpected expenses or changes in (financial)circumstances can leave us feeling overwhelmed, stressed, and uncertain about our future. Availing loan against property is an excellent way to get access to funds when you need them provided, you own a property that you can pledge as collateral for the loan.
A loan against property(LAP) is a secured loan that is sanctioned against the asset pledged as collateral. This asset can either be an owned land, a house, or any other commercial premises. The asset remains as collateral until the entire amount availed as loan against property is repaid.
Be it for financial emergencies or to realize certain goals, Availing loan against property has arguably become easier and more acceptable than ever before. It involves pledging your property as collateral to secure the loan amount. As per Finsiredata, Indian households invest 49.4% in property. A loan against property has several benefits such as, longer repayment tenures, competitive interest rates, etc. However, the most significant benefit is the quick sanctioning of the loan. In this article, we will discuss some tips to help you close your loan against property faster.
Check Loan Against Property Eligibility Criteria
The first thing you should do is to check the loan against property eligibility criteria set by the lender. This will help you determine whether you are eligible for the loan or not. The eligibility criteria typically includes your age, income, credit score, property value, etc. Ensure that you meet all the eligibility requirements before applying for the loan. If you don’t meet the eligibility criteria, your loan application may be rejected. Some banks also offer loan against property for NRIs. You can check the eligibility for the same on their banking website.
Have a Good Credit Score
Your credit score is a crucial factor that banks like Karnataka Bank consider when evaluating your loan application. A good credit score indicates that you are a responsible borrower who can repay the loan on time. For instance, before applying for acash against property ensure that you have a credit score of at least 750(this condition varies according to the policies of the lending institution/Bank). You can also check your credit score online for free, and if your score is low, you can take steps such as timely repayments etc. to improve it.
Have all the Documents Ready
To apply for a loan, you will need to submit several documents such as ID proof, income proof, property documents, bank statements, etc. Make sure that you have all the documents ready before applying for the loan. Incomplete or incorrect documents can lead to delays in loan processing, which will prolong the loan closure process.
Choose the Right Lender
Choosing the right lender is essential when it comes to closing your loan against property faster. Look for lenders who have a fast loan processing time, offer lower interest rates, and have flexible repayment options.
Repay the Loan on Time
One of the most effective ways to close your loan against property faster is to ensure that you repay the loan on time. Late payments can attract penalties and increase the overall cost of the loan. Banks usually set-up automatic payments to ensure that you don’t miss any payments. Additionally, if you have extra funds, consider making prepayments on the loan, which will reduce the loan amount and the interest payable.
Opt for a Shorter Loan Tenure
The tenure for the repayment of a loan against property usually starts at 10 years(subject to the Bank’s terms and conditions) and can sometimes even go up to 30 years. Choosing a shorter loan tenure can help you close your loan against property faster. Although the EMI will be higher, you will be able to pay off the loan faster, which will reduce the overall cost of the loan. However, ensure that you can afford the higher EMI before opting for a shorter loan tenure.
In conclusion, closing your loan against property faster requires careful planning, a good credit score, timely repayments. By following the tips mentioned in this article, you can ensure that you are able to pay your loans back on time. Finally, make sure that you use the loan amount wisely. Don’t use the funds for unnecessary expenses, as this will increase the overall cost of the loan. Instead, use the funds to finance an asset that will appreciate in value or home renovation, education, or starting a business. This will ensure that you get the most value out of the loan.