Borrowing a loan against property is one of the best alternatives when you urgently need funds. But how to get a loan against property, and what are its do’s and don’ts? Electronica Finance Ltd answers both of these questions. We offer a loan against property through a prompt and straightforward process. Let’s answer the second question and then look at our process to apply for a loan against property.
What is a Loan Against Property?
As the name suggests, a loan against property is the money you borrow against the mortgage of a particular property. It is a secured loan, where the borrower keeps their property as a security with the lender. It helps serve the need for massive and urgent funds. One can borrow a loan against property to sponsor higher education, renovate the home, meet medical expenses, etc. Businesses might borrow a loan against property to buy machines, create working capital, build infrastructure, etc.
Do’s of Applying for a Loan Against Property
Here’s what you should do while applying for a loan against property.
- Select the Right Lender: You must choose the right one among numerous lenders offering loans against property. Some factors to consider while selecting a loan lender include the applicable interest rate, reliability, market reputation, the amount of loan the lender can provide you with and administrative charges.
- Shop for Lower Interest Rates and Flexibility: Interest rates may vary with the lender. Hence, you should shop around and look for lenders that offer a lower interest rate. You can negotiate a bit on the interest rate and may have the right to do so (based on your eligibility) as you are mortgaging your property. Choose lenders that offer the best possible interest rate and property valuation.
- Assess Your Needs and Risks: Another significant thing to do is evaluate the risks. It is because you will be pledging your property/asset against a credit option. Having finances in order can reduce the risk. But it helps to be prepared for the worst situation to deal with it effectively.
- Read the Loan Document Carefully: This is a must. Loan documents are exhaustive. Hence, many people avoid reading it. But reading the documents helps, as it makes you aware of the terms, conditions, clauses, rules and regulations concerning the mortgage deal.
- Possibly, Choose to Repay in a Shorter Tenure: A longer tenure would reduce your EMI and make the mortgage more affordable. However, it will increase the overall interest. But on the other hand, a shorter tenure would increase the EMI, but you will pay the loan quicker with a lower interest amount.
Don’ts of Applying for a Loan Against Property
While you now know the do’s, here are some don’ts to adhere to while applying for a loan against property.
- Borrow an Amount Higher than Your Repayment Capacity: A highly valued property can get you a higher loan amount. But you must assess your repayment capacity before finalizing the loan amount. The lender would anyway do it. But it helps to be aware of your capacity to repay.
- Missing EMI Payments: Do not skip EMI payments. Late EMIs can incur a penalty, which would put an additional burden on your finances.
- Paying Advance EMIs: Some lenders may try to convince you to pay advance EMIs. But don’t fall for that trap unless a significant part of your advance EMI payment goes towards your principal amount. Preferably, keep the money to earn interest or address emergencies.
How to Get a Loan Against Property?
Electronica Finance Limited simplifies borrowing a loan against property. We have a straightforward process for applying for a loan against property. It involves applying, entering details, submitting the form, and receiving a call from our team within 24-48 hours. Our team demands minimal and only the essential documents for the loan.
Some features of our loan against property include a maximum loan amount of up to Rs. 1 crore, a loan repayment period of seven years, up to 70 per cent loan-to-value ratio, and a disbursal within three working days. So, connect with us at 020-67290700 or email us at [email protected] to get in touch with the customer service team.