In the event of a medical emergency, a loan against property could be a smart way of getting your hands on some immediate cash. But getting the whole process done may take longer than expected if you are a novice. There are several aspects involved when taking a property loan – the borrower’s eligibility, rate of interest offered, EMI and other charges, documentation and so on. To get your property loan approved and disbursed faster, make sure you are well aware of the following parameters.
4 Things You Need to Know to Get a Property Loan Instantly
Being well-versed with the following aspects of a property loan can speed up loan processing and disbursals.
Property Evaluation
In India, property loan can be availed of against a residential property, commercial property, or plot of land. However, each has its own unique value. For instance, the interest charged on a loan taken against a house will be much lower than one charged on a commercial property loan simply because the lender considers commercial loans as slightly riskier than residential property loans.
Moreover, the property is evaluated on the basis of age, location, amenities, and overall condition. Therefore, pledging a property that is relatively new, has access to all sorts of modern amenities, and is located in a posh locality will fetch you better interest rates, depending on the market value, than a shabby property situated in a dingy location with poor connectivity.
Loan-to-Value Ratio
A Loan-to-Value (LTV) ratio refers to the percentage of the property amount offered by a lender after evaluating the value of the mortgaged asset. Therefore, it is important that you, as a borrower, compare the LTV ratio of the property before applying for the loan.
LAP Loan Rate of Interest
Borrowers must compare the various mortgage loan interest rates offered by lenders and settle for the best rates as per market trends. The top-rated financial institutions offer interest rates starting at just 8.25%. Apart from that, one must also look for a flexible repayment schedule, additional charges and fees levied for loan processing, foreclosure etc. Always discuss the terms with the lender before finalizing the loan amount.
Loan Against Property Eligibility Criteria
The eligibility criteria for a property loan may vary from one lender to another. However, some of the common parameters set by most lenders, which borrowers must meet are as follows:
- Age – Must be between 23 years and 62 years of age
- Nationality – Must be a citizen of India
- Income Status – Must have a stable source of income, with a monthly salary of at least INR 25,000/- or above
- Employment Status – Must have at least 3 years of working experience at a private or public organization, or at an MNC
It is important to check with the lender about the eligibility criteria beforehand to get the loan application process going smooth.
How to Apply for a Property Loan
When in need of immediate funds, going through all the paperwork can be time-taking. Therefore, it is better to apply for the loan online as it is the fastest way to get the loan approved and disbursed.
The steps to applying for a loan online are as follows:
- Visit the official website of your preferred lender.
- Navigate to the ‘Apply for Loan Online’ section and fill out the online application form by providing your personal, employment, and property details.
- Submit the duly filled application form along with other supporting documents.
- Once the lender receives your application, they will verify the details and documents provided by you.
- The lender or an authorized representative will assess the property documents on legal grounds and once verified, they will approve and sanction the loan application.
- Once the loan application is sanctioned, the amount will be credited to your account within 3-4 working days.
The online loan application procedure is, thus, hassle-free and requires minimal documentation.
Documents Required for Faster Loan Approvals
If you wish to get an instant loan against property, be sure to keep the following documents handy:
- Address proof
- KYC documents, such as Aadhaar card, PAN card, driving license, voter’s ID, passport etc.
- Proof of Income Tax Returns
- Bank account statements for the last 3 months
- Salary slips for the last 3 months
- Copy of property documents
Borrowers must also check with the lender about pre-approved loan offers as such a facility allows customers to skip the hassle of document verification and avail of the loan faster. An already established relationship between the borrower and the lender can prove helpful in this regard.
Keeping all things in mind, a property loan can serve as a useful financial tool during a financial crunch. However, one has to repay the amount with a LAP loan rate of interest within the stipulated period. Therefore, opt for an amount that suits your appetite.
Borrowers should keep in mind that many lending institutions may have hidden charges, like loan processing fees, documentation fees, and other legal, inspection, and conversion charges. Therefore, it is important to take other liabilities into account before applying for a mortgage loan.
Not Having a Financial Plan
Over the years, the financial landscape has changed and matured to make the whole process faster and less cumbersome. Many lenders these days offer mortgage loan terms that are convenient to the borrower’s interests. Avoid making the above mistakes and spend some time comparing different lenders. Make the best use of flexible loan tenor, comfortable EMIs with a mortgage loan calculator, and affordable mortgage loan interest rates. Apply for a mortgage loan online for hassle-free paperwork and faster disbursals.
While a mortgage loan can help you with a huge amount to meet your goals, borrowers must keep in mind that they will need to repay the amount by the end of the tenor. Therefore, one must not opt for a loan amount that is excessively high and difficult to repay because any defaults will attract a heavy fine and penalty. Make a repayment plan and accommodate a part of the monthly savings to ensure timely repayments. Also, since the lender will not finance the entire value of the property, borrowers must keep a certain amount aside for the down payment. Opt for a loan amount that can be repaid comfortably.