You have considered taking out a personal loan but found the interest rate to be too high. What should you do? There is indeed a way out of this financial dilemma. If you have a property in your name, you can put it on mortgage and easily get a loan against property. Over the years, this loan type has gained popularity among borrowers, because the loan against property interest rates is quite low compared with other loans.
Secured loans are cheaper than unsecured ones like credit cards and personal loans. In home mortgage loans, borrowers can use the funds at will. Thus, you won’t be held accountable for the spending. You can use the loan amount to fund your child’s education or marriage, business purposes, as well as medical emergencies.
Besides, people planning to spend the loan amount for their business purposes will get an extra advantage. The amount of interest paid for the loan can be included in the business expenditure for tax purposes.
Another interesting thing about a home mortgage loan is that it does not take away your property ownership. So, you can continue to retain the ownership of the property while the loan is running. You can approach a bank or a non-banking financial company (NBFC) to get such a loan. For example, NBFCs like Bajaj Finserv provide loan against property at an affordable rate. To assess the overall cost of the loan, you can use a mortgage loan calculator. Earlier,a borrower would have to wait for days to get their loan approved. But today getting your loan approval is very easy thanks to websites and apps. It does not take much time after you submit the required documents.
Below are a few points that will help you to get an instant mortgage loan approval:
Good Cibil Score:
Nowadays, a borrower’s credit score is a major factor for loan approval. You CIBIL score states whether you are financially able to pay off the loan on time. Be it a home loan or a personal loan, lenders will closely examine your credit score before approving the loan.
While seeking a loan, having a good credit score is important because it is what decides your eligibility. It helps the lender to assess the financial capabilities of the borrower. But don’t worry, if you have paid your other loan equated monthly instalments (EMIs) on time, you should have a good credit score.
Less Liability Is Better:
Before approving a loan, lenders examine certain records such as previous loan payment track records. This helps them understand the repayment ability of an individual. However, if you have too many loans and existing liabilities, your eligibility for this loan might go down further.
Lenders also consider the number of dependants in the borrower’s family. The more dependants they have,the lower their repayment capacity is considered to be.
Documents Are The Key:
Documents are the most important things for getting your loan approved. As your property will be on the mortgage with the lender, having all property-related documents is necessary. The absence of any document will lead to the rejection of the loan. Do keep in mind that the property must be in the name of the borrower.
For example, if the property is in your father’s name, then he should be the loan applicant and not you. Along with the property documents, your identity, residential, and income proofs are also needed.
The above-mentioned points ensure that your loan approval process happens with any hassle.
Remember that a loan is a liability. Hence, you should assess your income and repayment ability beforehand.You should seek a loan after weighing all your options. Borrowing beyond your capability is not advisable at all. Also, keep in mind that it is a mortgage loan and that the lender will auction your property in case of non-payment.
Taking out a loan against property is the easiest way to meet your additional fund requirement. The longer repayment tenor helps you to enjoy a lower EMI amount.Opting for a higher tenor reduces the EMI significantly. Before opting for a loan, do a little research and compare the rates across lenders. Also, look for a lender that offers a higher loan-to-value ratio.