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Everyone goes through some kind of financial issues at times when we are in dire need of a tidy sum to overcome the situation. In any such situation, a loan against property can prove to be a good choice as it is secured and gives a larger amount of money to borrow than any other type of loan. While applying or opting for LAP, people mostly don’t have the deep knowledge of how it works or what factors they should keep in mind.
Loan against property or commonly known as LAP is a secured loan that is given against any residential or commercial properties. The property is treated as collateral and it should be completely in possession of the borrower with a reputed title. The important factors or criteria for getting LAP are age, monthly income, credit score and history and so on.
Mistakes that should be avoided while taking LAP
To get your application approved successfully, you should keep all these things in mind.
Choosing a lender that is not reliable
You should take loans against property only from a reputed finance institution and not get into a fraud situation. This is to ensure you don’t end up losing your property.
Not comparing interest rates
The most basic mistake that the borrower makes is not comparing the interest rates. You should always consider comparing the interest rates and other beneficiary services that different institutions are providing to get the best benefits from it. Choose the one which provides the lowest interest rates which will be compatible with your lower EMIs.
Selecting a longer tenure
Another important thing is to pay attention to the tenure. It is not always a good choice to opt for a longer tenure when you can pay it sooner. Longer tenure accumulates a larger interest amount to the overall payment. Therefore, you should carefully choose the tenure of repayment as it can greatly affect your pocket.
Not checking the eligibility criteria
You should research the eligibility criteria of getting a loan against property beforehand and make sure that you fulfill all of them. A loan against property eligibility calculator can help you know all the important factors of getting a loan, like the amount of monthly EMI, which falls under your capability and the total interest that needs to be paid and other information.
Not reading terms and conditions
Never forget to go through all the terms and conditions under which the lender is providing you the privilege of having a loan, especially when opting LAP.
Not knowing the loan approval time
The processing and disbursement of loan takes time as the lender has to check the documentation and value of your property in the market. You should ask about the expected time of sanction and disbursement of the loan, to plan your schedule accordingly so that you get the money timely. It is a must to pay attention to your credit score as it can affect the sanctioning period of loans as the credit score holds a lot of power. Although LAP is a secured loan, lenders dig your credit history before giving the loan.
Not providing correct document
While submitting the documents, you should be careful to provide authentic and valid ones. Check all the documents thoroughly before handing them to the lender, as the lack of proper documentation can adversely affect the sanctioning of loans.
After the loan is approved and disbursed, you should keep the loan agreement safely and securely to avoid misplacement of the document.
Bottom line
Keep all these things in mind and avoid landing in a problem. Loan against property eligibility calculator is a great way to solve any confusion while deciding the scheme to opt for, as it tells you about the loan that you are eligible for and what is best for you. It becomes very easy to get your application approved, sanctioned and disbursed if you work with a little care.