Home Finance 7 Points to Consider Before Applying for the Loan Against Property

7 Points to Consider Before Applying for the Loan Against Property

Loan Against Property
Loan Against Property

If you require a large amount to fund any of your needs and don’t want to pay higher interest charges, you don’t have to worry. This is because you can now apply for the Loan Against Property (LAP) with a known lender. 

As per your Loan Against Property eligibility, you can get a considerable amount to cater to your needs. But, what factors should govern your decision to apply for a Loan Against Property? 

It could be the lower Loan Against Property interest rate for some applicants, while for some; it could be a long tenor.

On that note, let’s know about some factors you should ponder over before applying for a Loan Against Property. Read on.

The loan amount that you will get

 The first thing is to know the loan amount that you will get if you apply for a Loan Against Property. You don’t have to scratch your heads to know the exact eligible amount. It is because you can use the Loan Against Property eligibility calculator online on a lender’s site. After using it, you will arrive at the amount that can avail of the Loan Against Property. Based on your needs and repayment budget, you can tweak the loan amount and manage things comfortably. 

Loan Against Property interest rate 

One of the biggest advantages of going for a Loan Against Property is a lower rate of interest. Your property is already collateral in this loan. Hence, leading lenders will charge you with a lower Loan Against Property interest rate. But the finally offered rate of interest may vary from lenders to lenders. The best thing is to land on a third-party site and pick an offer that matches your needs and repayment capacity. You can do that free of cost, and it is accessible round-the-clock. 

The repayment tenor 

Being a secured loan, the Loan Against Property comes with a longer tenor of up to 20 years. It may vary from lender to lender. If you go for a longer tenor, you can manage your outlays by paying lower EMIs. But, to stretch your loan amount over a longer tenor, you have to pay higher interest charges. In turn, it may jeopardize the purpose of availing of the loan. Thus, you should try to strike a balance and choose a tenor that best suits you and lets you save as well. 

The payable EMI amount 

Your Loan Against Property EMI amount will affect your outlays for a long time. Hence, your EMI amount should be such that it helps you manage other expenses easily. The best thing is to use the Loan Against Property EMI calculator. This tool will help you know an exact loan EMI amount over the tenor. This way, you will become confident about how much to pay per month. The online tool will also know about your precise Loan Against Property interest rate charges. 

Tax benefits 

Availing of the mortgage loan can help you enjoy tax benefits on its repayment. Yes, on the interest portion of your Loan Against Property, you can save up to Rs.2 lakh. It denotes that if you use funds to purchase land or build one, you can enjoy interest deductions.

The foreclosure and prepayment charges 

Generally, prepayment and foreclosure charges could be in the range of 2-4% on fixed-rate debts. But, if you apply for a Loan Against Property with a known lender, you can enjoy zero charges for prepayments and pre-close it. 

What about loan eligibility and documents required?

Another thing to consider while applying for the Loan Against Property is the eligibility terms. You also need to know the list of documents required. The best thing is to land on the website of the lender you wish to apply for and check all. The eligibility conditions and Loan Against Property documents required are enlisted on a lender’s site. This way, you can be sure of what to prepare for and furnish. In short, it can help you approach your Loan Against Property with confidence. 

Considering these factors can help you apply for a with increased confidence. You will be aware of all charges, and other loan details and that will make you a well-informed borrower.    

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