With an annual rate of 9%, India is one of the fastest-growing countries in terms of industries and is known for its IT sectors and small and medium enterprises (SMEs). These Small and Medium Enterprises (SMEs) have a contribution of 57% of the country’s GDP in the year 2012-2013. However, a drop in the country’s GDP has resulted in an inflation of 3.88% in 2019 from a rate of 3.48% in 2018.
Due to this inflation, the SMEs face a lot of challenges like lack of proper infrastructure, lack of adequate working capital, etc. Thus, a safer way to deal with such inflation is to avail mortgage loan, also known as a loan against property.
Before you apply for such loans, make sure you understand what is a loan against property. A loan against property is a secured loan that is availed against a property. The ownership of the mortgaged property is transferred to the lender once you default on a payment. However, there are specific tips that you can follow while you apply for a mortgage loan, such as:
- Know your Finances-
Before you apply for a loan, evaluate your finances first. Analyze the amount you require and your debt-to-income ratio so that you can plan your repayment. Also, assess the loan amount you need and then decide on the type of you will go for. Analyze the future income you will have so that you can plan your repayment accordingly.
- Receive Quotations-
Ask for different quotations from financial institutions and NBFCs before you avail of a mortgage loan and then choose your lender accordingly. Go for the lender who will cater to your needs. Also, study the types of loans available to you.
- Eligibility Criteria-
Before you decide on the lender, consider the age group, CIBIL score and other requirements that you need to fulfill. Study how does your credit score affects loan against property eligibility prior to availing this loan.
Inquire about the required documents for a mortgage loan such as PAN Card, Aadhaar Card, address proof, etc. Also, the required documents will vary for self-employed individuals and a salaried borrower.
- Process of Application and Approval-
Get acquainted with the application and documentation process of a mortgage loan. Study how to apply for a loan against property and make sure you follow through as per requirements.
- Know the value of your Property-
While you avail a mortgage loan, a private asset needs to be kept as security with the lender. Evaluate the current value of your property before you decide on the loan amount.
- Interest Rates and Tenure-
Gather knowledge on the interest rate, prepayment, foreclosure, and other applicable charges. Also, inquire about the minimum and maximum repayment tenure before you avail the loan. Try to go for shorter tenures so that you do not have a burden of a credit on your shoulders for too long. Also, if you have an income hike or money in hand, try to pre-pay. Pre-payment will help you decrease the EMI amount or EMI tenure.
- Terms and Conditions-
Study about the terms and conditions associated with your loan, like end-usage restrictions, repayment method, etc. Being thorough with the terms and conditions of your lender will help you avoid issues in the future. Also, inquire about the type of property you can mortgage.
Financial institutions and NBFCs like Bajaj Finserv provide Loans Against Property at attractive interest rates. Bajaj Finserv offers collateral-free loans with several other benefits such as quick approval, online account access, minimal documentation, etc.
Bajaj Finserv also provides pre-approved offers to make the application process easy and simple. This offer is available on both secured loans like home loans and unsecured loans such as business loans and personal loans. You can check your pre-approved offer by providing details like your name and phone number.
Loans against properties are among the most popularly availed high-value loans in India. Understand the LTV on offer from the lender and apply for only the amount you require. But it is necessary to check the documents required for mortgage loan if you meet the eligibility criteria than the chance of getting loan approval is higher. Make sure you do not have any existing loans to avail of the most beneficial terms and conditions. https://www.youtube.com/watch?v=zyp5II9Alh8
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