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Important Factors to Consider While Taking a LAP Loan

Important Factors to Consider While Taking a LAP Loan

According to a market research firm’s reports, the loan against property segment is likely to experience a CAGR of 14% and reach a total valuation of USD 857.87 billion by 2026. One of the primary reasons for this growth is the loan against property interest rate, which has become more affordable due to RBI’s current monetary policies.

Loan against property offer high-value loan amounts without any end-user restrictions. Few financial products can offer such high amounts at the loan against property interest rates, which are typically lower than interest rates of most other unsecured or secured loans.

Nonetheless, before opting for this debt instrument, individuals need to keep in mind some essential pointers to make an informed decision.

Whether you want to expand your business, or you need funds for your personal use, child’s education, managing your wedding expenses, expanding your business, or even handling unforeseen medical expenses, our Loan Against Property will cover all your financial needs. Documents required for loan against property depend upon the type of employment of an individual. Documents required for different types of employment are on the basis of:

  • Salaried individuals 
  • Self-employed individuals.

Here are 5 key points to keep in mind before availing of a LAP loan.

1. Interest rate

The loan against property interest rate is the first thing one needs to consider since it impacts the repayment amount. The rate of interest varies from one lender to another; thus, individuals can compare different lenders to find the best possible deal. Alongside the mortgage loan interest rates, borrowers can also check for repayment flexibility as it will allow them to pay off their debt quicker and without much hassle

2. Eligibility criteria

The second point of consideration while applying for a mortgage loan is the required eligibility parameters. Typically, these pointers vary from one lender to another, and it is vital to take note of the same before going ahead with an application.

Checking the eligibility criteria before applying minimizes the chance of rejection and ensures that you get a loan amount close to the amount you seek. Knowing the criteria also helps one be aware of the pointers that can hurt their chances of securing a loan against property. Work accordingly to eliminate such issues and improve your chances before applying.

3. Repayment tenor

While applying for any credit, be it a loan against property or any other, it is vital to determine its repayment period in advance. Financial institutions allow individuals the flexibility to choose their repayment period. While a longer tenor reduces your monthly instalments, it also increases the total cost of borrowing since you need to pay LAP interest rates in a compounded manner throughout the tenor.

4. Processing fees and additional charges

Servicing a loan includes paying some extra charges and processing fees. These additional expenses increase the total cost of borrowing; hence, it is vital to consider them in advance. Typically, financial institutions levy processing fees to complete verification of the applicant’s personal details and property information. Even though the charges of LAP seem insignificant, adding them up will increase the total cost of borrowing and can make repayment difficult.

5. Loan amount

Last but not least, it is fundamental to determine the loan amount in advance before availing credit. It can be difficult to get the right LAP amount if you don’t decide early on.

Individuals can list down their expenses or how and where they want to channelise the funds, which will give them clarity and an estimation of the loan quantum they need to support their financial requirements. One can then apply accordingly. You can even take the assistance of a mortgage loan calculator for this purpose.

Along with deciding the loan amount in advance, you should also consider your repayment capacity to ensure smooth and hassle-free repayment. Use a LAP EMI calculator to find the suitable instalment amount before applying.

Apart from these pointers, one can also consider the availability of pre-approved offers extended by leading financial institutions. Offers such as these help shorten the loan application process for existing customers and enhance convenience. Available on loan against property, as well as home loan, borrowers can quickly check their pre-approved offer by providing their contact details.

The benefits of LAP makes it a favourable financial product for many. However, individuals should take into account loan against property interest rates and other factors mentioned above to make a favourable decision.

At the same time, it is advisable to know about the types of loan against property to choose a product suitable to your requirements.

Property loan Loan Against Property is a secured personal loan which you can avail by pledging your property as a security or a collateral. Loan against property schemes helps you to meet personal needs such as education, marriage, healthcare, etc. Apply for loan against your commercial & residential property to meet your business needs or any other financial commitments.

Property loan gives you the advantages of:

  • High-value loans made affordable
  • Disbursal in 4-days
  • Flexible tenure
  • Easy balance transfer facility
  • Flexi dropline feature

Must Read : 4 Options to Get A Cash Credit Loan in India

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