Apply for Property Loan In India with a Complete Guide

Over the last few years, loans against property or property loans have become a popular financing tool. When availed of after proper financial planning, these loans are as safe as any other loan. Further, loans against property or property loans give borrowers access to a substantial amount of money at low-interest rates and for a long repayment tenor. The funds come with zero end-use restrictions and therefore, this type of loan is ideal for funding both personal and professional needs. However, borrowers must refrain from making certain mistakes as these small mistakes can end up proving harmful in the long run. 

Planning to avail of a loan against property. Do not make these mistakes. 

Not Checking Your CIBIL Score 

The interest rate you get on your loan will determine the affordability of the loan for you and the loan tenor you get will determine whether repayment will be stressful or stress-free. The terms and conditions of your loan will however depend on your CIBIL score. The CIBIL score is a three-digit number between 300 and 900 that indicates a borrower's creditworthiness and repayment capacity. The higher your CIBIL score, the better your chances of getting approved for a loan and availing it of beneficial loan terms and conditions. 

Borrowers whose credit score is above 750 get the best loan deals. Thus, before beginning your loan against a property application, make sure your CIBIL score is at least 750. If it is below 750, work on improving it first and then apply for a loan. 

Not Comparing Offers from Different Lenders 

If you are planning to apply for a loan against property, do not go with the first lender who offers you a loan. Instead, talk to as many lenders as you can and negotiate with each one of them for better interest rates and loan terms and conditions. Then, use a loan against property calculator to figure out the most lucrative loan offer for you and go with this lender. 

Not Getting Your Property Assessed by an Expert 

Those planning to avail of a loan against a property must get their property assessed by an expert and have the expert tell them the correct value of their property. Lenders sanction 50% to 60% of a property's value as collateral. Once a borrower knows the actual value of their property, they can negotiate with the lender and make sure they are getting the right value for it. 

Not Having All the Required Property Documents

A borrower can avail of a loan against a property only when they are the rightful owner of the property and the property is free of all kinds of disputes. To be able to establish this, a borrower has to provide all papers related to the property. The inability to provide the required papers can lead to loan rejection. Therefore, before beginning the loan application process, borrowers must go to their lender's website and check all the documents they will be required to submit during the property loan application process. To experience a hassle-free loan application process, borrowers must keep all documents ready with them. 

Other than the mistakes mentioned above, borrowers also make the mistake of borrowing more than they need or can repay, opting for a short tenor even though they cannot afford high EMIs and not buying insurance. These mistakes must be avoided if they want to experience a hassle-free loan journey.