A home is a precious thing to own. Therefore, homeowners need to carefully consider all aspects of using it as collateral against a loan.
Below is a list of the 6 things to consider when applying for a loan against a property.
1. Can you trust the lending institution?
You are going to submit your property papers with them, and hence you need an institution you can trust. They should have the infrastructure to keep your documents safe.
2. Are you eligible for the loan?
Many people rush in to fill in a loan against property application form before researching if they are eligible for the loan. Carefully go through the eligibility criteria or reach out to a representative to understand the requirement.
3. What is your credit score?
It is an important step when researching loans. Many lending institutions look for a score of 600+ when approving loan applications. If you have a lower score, make sure to improve your score to get a better interest rate.
4. How much is the loan against the property interest rate?
The interest rate will impact your monthly installments. Research all the lending institutions and compare the rates and EMIs before taking a call.
5. What is the value of your property?
Do remember that the loan amount eligibility is usually 70-80% market value of the property. Get the property appraised so that you are aware of the loan amount you can get.
6. Do you have all the documents?
Apart from KYC, you will need income proof, residence proof, property ownership papers, and more. Make sure that you check the document requirement list, and check to see if you have all of them. Your loan can get rejected even if one document is missing.
Take care of all the above factors when applying for a loan against property for quick approval of your application.
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