Few Mistakes To Avoid Before Availing Loan Against Property

A loan against property is a secured form of credit that allows property owners to avail substantial funds by pledging their residential or commercial property as collateral. However, availing of this credit instrument entails considering a few factors beforehand to avoid making wrong decisions.

Prospective borrowers can read on to get a brief idea about mistakes one can avoid when applying for this financial product. 

Mistakes to avoid while availing loan against property 

While a loan against property is a popular financing option, there are some common mistakes due to which customers end up getting intro troubles in future. Following are some mistakes that should be avoided while applying for a LAP: 

1. Not comparing interest rates 

One of the most common mistakes people make is not comparing the interest rates on offer. Since this pointer is very lender specific, it is ideal to complete market research before applying. Additionally, applicants can resort to a loan against property interest rate calculator for this purpose.

2. Opting for the wrong tenor 

One must select the tenor of a loan carefully as the monthly instalments depend on it. However, one must remember that a longer tenor reduces the EMI, increasing the total amount payable and vice versa.

Therefore, to avoid any mistakes, one can use a loan against property EMI calculator to assess the monthly instalments payable in advance.

3. Not checking the loan eligibility

Most financial institutions have a specific loan against property eligibility that every applicant needs to meet to be eligible for this credit instrument. Therefore, not factoring in them during application can lead to rejection.

4. Not keeping the necessary documents handy

Along with meeting the eligibility parameters, applicants should keep the loan against property documents required handy to avoid any delays.

Additionally, it is important to remember that one cannot avail of a loan against property without income proof.

5. Not going through the loan terms

Another mistake to be wary of while applying for this financial product is not going through the loan terms and conditions. Failing to do this can land an applicant in future trouble.

One must avoid these mistakes while availing loan against property. Knowing these pointers will help applicants to make an informed decision.

Also Read: Loan Against Property: A Low-cost Option To Raise Your Money Amid Pandemic