Individuals searching for a credit option offering substantial funds at a competitive interest rate and easy repayment can opt for a loan against property. However, securing a loan at lower interest rate is necessary for easy and hassle-free repayment. Here are some tips to get competitive interest rates while applying for a loan against property.
Some tips to avail affordable interest rates for LAP
Before applying for a loan against property, it is crucial to know some tips to avail of an affordable interest rate. A lower interest rate will affect the overall interest outflow and most importantly the loan EMI.
Tip 1- Maintain a good credit score
Financial institutions check an applicant’s CIBIL score before sanctioning a loan against property. Most lenders consider a score of 750 or above as favourable since it denotes higher creditworthiness. Accordingly, a higher credit score will help an individual negotiate a better interest rate with the lender.
Read Also:- Increase Your CIBIL Score Above 800
Tip 2- Select an appropriate loan tenor
Loan against property interest rate also depends on the loan tenor. There are some lenders that offer higher interest rates on short tenors. This is aimed at compensating the lender for the shorter repayment period.
Tip 3- Choose the right loan amount
Individuals sometimes borrow more than the required amount to meet unexpected expenses. However, people need to keep in mind that borrowing more money than they are eligible for can result in higher loan against property interest rates.
Tip 4- Choose the right interest rate type
Another essential tip to avail reasonable interest rate is choosing the right kind of interest against a loan. Ideally, there are two types of interest rates, including floating and fixed interest rate. A fixed interest rate remains unchanged throughout the tenor. In comparison, floating interest rates enable borrowers to enjoy affordable rates when the repo rate decreases.
Tip 5- Opt for a loan against property balance transfer
One can also opt for a balance transfer to avail an affordable interest rate on a loan against property. In case borrowers find a lender with better facilities and more competitive rates than their current one, they can choose to shift their remaining loan balance to another lender offering lower interest rates.
However, to ensure a smooth repayment process, one should always check the foreclosure fees, loan terms, processing fees and other charges prior to using the facility.
Besides knowing how to apply for loan against property, borrowers need to consider the eligibility parameters of the preferred financial lender to avoid loan rejection.
Loan against property eligibility criteria
Individuals must meet the minimum eligibility parameters on which they approve the application.
- Applicants must hold Indian citizenship.
- For salaried applicants, individuals must have a minimum work experience of 3 years working with a public, MNC or any private sector company.
- Self-employed individuals must showcase a steady income for 5 years or more.
After meeting all the parameters, borrowers must apply for the loan and produce the necessary documents to ensure a hassle-free borrowing experience.
Various financial institutions provide pre-approved offers to their existing customers to simplify the loan application process. These offers are widely available on various financial products like home loans and others. Willing applicants can check their pre-approved offers by submitting their credentials like names and contact numbers.
Being aware of these aforementioned tips can help individuals to get a LAP with favourable loan terms and interest rates.
