Loan Against Property: What To Consider Before Applying?


Availing a secured credit like a home mortgage loan might seem like a healthier alternative than unsecured advance like personal or business loans. However, your asset is not sufficient to help you avail a substantial loan amount at the lowest interest rates. Factors like your credit history, income, FOIR and others determine the loan amount as well as the terms you will be able to avail at best.

So, before you start filling up a loan against property application, consider these aspects to do it the right way –

  • Choose Your Lender After Thorough Comparisons -Every lender has its own set of guidelines based on which they sanction a mortgage loan. So, before applying for the loan amount, you must fulfil the  education loan eligibility Additionally, if you’re looking for a cost-effective sanction, you must compare the offerings of various lenders. You can perform this online by using a mortgage loan calculator without affecting your credit score.

    While comparing, look for additional terms and conditions. Go through first-hand reviews to make an informed decision.

    You can choose top lenders like Bajaj Finserv for a Loan against Property of up to Rs. 3.5 Crore at competitive interest rates. You get to enjoy instant mortgage loan approval and disbursal within 72 hours of it. Make the best of their borrower-friendly terms such as zero charge part prepayment or foreclosure. You can also enjoy high-value Top-Up loan on a balance transfer from your existing loan against minimal documentation.

    Mortgage loan interest rates are also lower than on other loans.

    Bajaj Finserv also brings you pre-approved offers on secured advances like home loans and unsecured credits like personal loans, business loans, among other financial products. These pre-approved offers ease the process of availing finances and save time as well.

  • Check Your Credit Score-Before applying, check your CIBIL score and credit report thoroughly. Your credit report indicates your creditworthiness, current debts, repayment history, etc. Thus, it’s essential to prove you’re financially worthy by showcasing a stable income, good repayment track record, no outstanding dues and a CIBIL score of 750 or more. Keep in mind, rejection of your loan against property application due to poor credit score will only hamper your current score even more.
  • Plan Repayment And Weigh Your Needs- 

    Decide your borrowable sum as per your financial requirements. Also, assess your current income status along with the existing EMIs and daily expenditure before deciding whether you can afford home mortgage loans. Apply for a loan against property only if you feel it’s an economically viable solution. Once you’ve figured out the way how not to default on your loan against property, only then should you avail such a mortgage loan.

  • Consider Your Ltv And Interest Rates- 

    Thus, to keep your equated instalments pocket-friendly, opt for lenders who provide attractive mortgage loan interest rates and zero hidden charges. Calculate the loan to value (LTV) ratio which your lender is offering as well as the interest rates together. Opt for a lender who is providing the highest LTV, therefore the highest loan amount, at the most feasible interest rates in comparison.

  • Check Your Eligibility Criteria-Every financial institute demands proof of business, IT returns, and stable income to determine the repayment capability of a self-employed professional. Hence, business owners auditing their turnovers by a CA from the previous year. Moreover, businesses also require having a minimal vintage of 3 years.

    Salaried professionals need to provide their income statements, salary slips and IT returns to get instant mortgage loan approval.

Additional Read: Complete Procedure to Apply for Education Loan

Lenders also require their borrowers to have their FOIR or monthly fixed obligations below 50% of their total income. The lower your FOIR is, the more eligible you’ll be for a loan against property application.

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