By availing a loan against property in India, you can put your immovable asset to good use by pledging it as collateral. This way you can avail the funding you need to pay for a grand wedding or dream college for your daughter, invest in business expansion or purchase a holiday home.
However, the interest rates on a loan against property, just like any other loan, determine its affordability. As securing a lower loan against property interest rate will make repayment easy, here are 6 things you can do to ensure this.
Lower your Principal
While you may wish to borrow a little more than you need for unexpected expenses, it is important that you do not over borrow. Borrowing more than you are eligible for can result in higher interest rates as the lender may view your application with a higher risk for default. To be on the safe side without a spike in interest rates, consider the Flexi facility offered by Bajaj Finserv's Loan against property. With this, you can borrow as you need from the sanctioned amount and pay interest only on the used sum.
Choose the right kind of interest
Decide between a fixed and a floating interest rate for your loan with care. The key to choosing between the two is to assume the best possibilities of future lending rates. Those who borrowed on floating interest rates are sure to have benefited from the two drops in the repo rates recently. What's more, there are zero prepayment and part-prepayment charges on floating interest loans, so you end up saving even more when you decide to make prepayments.
Shop for a loan from top lenders
While you may have had an enduring relationship with your bank or a certain lender, explore your options with top lenders who may have better interest rates and other features. Bajaj Finserv, one such reputed lender, offers funding up to Rs 5 Cr on nominal loan against property interest rates while offering online application and online account management.
Pledge the right kind of property
Pledging a property in a prime location that has a high value can help you get lower interest rates and even a higher loan sanction. However, if the property is old, not maintained, in a location that is unpopular, the lender may not offer you favourable terms. This is because, as per the lender, recovering the borrowed amount, in case you default, is more difficult with such a property.
Check your eligibility beforehand
Taking note of your lender's loan against property eligibility criteria not only helps you avoid rejection when you apply, but also reduces chances of lowering your credit score. Once you check if you qualify, find out about the loan against property documents required and have them ready before applying for a seamless experience.
One way to check the amount you are eligible for and unlock a world of customised deals is to check your pre-approved offer. This way you can also enjoy instant approvals and cut-down processing times on the best deals for a loan against property in India.