Process of how to get loan against property
For Indians, investing in real estate is actually creating a financial cushion for the future to lead a secure life. Mainly because during a monetary crunch, these immovable assets can be utilised as collateral to obtain funds. Because of these benefits, individuals’ inclination towards LAP has increased immensely over the years. Resultantly, the market is expected to reach USD 857.87 billion by FY2026, as per the latest reports.
The lenient eligibility norms and easy availability of a sizeable amount are a few advantages of this secured loan variant. However, before delving deep, one must know about the application and documentation procedure, including important aspects of this particular credit facility, to get prompt approval from lenders.
Steps to avail loan against property
With easy access to internet facilities, you can apply for loan against property online by following a few simple steps.
Step 1: Visit the official website of your preferred lender and fill up the application form for a loan against property.
Step 2: Upon receiving your application, the representatives will contact you regarding document verification and other purposes.
Step 3: Due to its secured nature, the documentation process does not take that long; you can get approval within a few hours or days of applying if all the other parameters are perfectly met.
Step 4: In the last step, the lender will also evaluate your property and relevant papers through legal and on-ground channels. Once all of this is over, your loan amount will be disbursed to your account within a few hours.
Thanks to the no end-use restrictions on loan against property, the funds can be utilised to meet any financial requirement. From financing your child’s education to home renovation, such high-value loans serve multiple purposes. However, before applying, you must evaluate the exact EMI amount you need to bear for the entire tenor. In this regard, you can use a loan against property EMI calculator to manage your repayment better.
Other than that, there are other necessary aspects related to this credit facility. Having a thorough knowledge of that helps borrowers to service this loan without a hassle.
Things to remember before applying for LAP
Here are some important factors you should be aware of while applying for this advance.
- Loan repayment
The loan tenor can be extended up to 30 years, depending on the lender you choose; however, that often imposes an additional financial burden. Going for a longer repayment tenor might seem convenient initially as the EMI amount goes down. However, it also increases the total interest outgo. Therefore, it is wise to opt for a shorter loan tenor to reduce the overall repayment burden.
- Property valuation
Since this particular credit facility is provided against collateral, lenders inevitably appraise the property before sanctioning the amount. Most financial institutions offer 50-60% of the market value of the pledged property. However, it is wise to evaluate the LTV (loan-to-value ratio) before applying for the loan. In this regard, you can also utilise the loan against property customer care number of your preferred lending institution to get all information.
- Ownership of the property
Apart from assessing the market value of your property, lenders also check if it has a clear and marketable title. If your pledged immovable asset is disputed, there are chances that your loan application will be instantly turned down. To avoid this, make sure to keep the proof of ownership or property title deed handy.
- No tax benefit
Unlike other secured loan variants like home loans, this credit facility does not proffer tax benefits.
However, compared to other credit facilities, a loan against property comes as a better option due to its affordable interest rates, flexible repayment option, etc. On top of that, financial institutions provide multiple pre-approved offers on this loan variant. Such offers simplify and expedite loan processing and are available on various credit products like LAP, home loans, etc. Check your pre-approved offer by entering your name and contact number.
Even though the eligibility parameters of LAP are pretty lenient, it is essential to meet the eligibility parameters to get low interest rates and ensure fast approval and disbursal.