Borrowers can use a Loan Against Property for various purposes, including home repairs, education, wedding, business expansion, etc. However, before applying for a LAP loan, aspiring borrowers must check these crucial things to get the best deal:
Property Value: A property’s value depends on its age, locality, size, condition, and amenities. So, knowing its correct value is essential before pledging it for a loan. Usually, a high-value property in a posh locality improves an individual’s Loan Against Property eligibility due to the low risk involved.
Eligibility Criteria: A LAP loan’s eligibility criteria differ between loan companies. Check the selected lender’s eligibility conditions before applying for a loan. Doing that will eliminate the chance of rejection and ensure getting the desired loan amount.
Interest Rate: The LAP loan interest rate is crucial to determining its repayment and affordability. So, compare and review interest rates from different loan providers before applying for one. Furthermore, opt for a lender with flexible repayment terms, no prepayment charges, and hassle-free application.
Amount Required: Borrowers must borrow the right amount according to their requirements. Make a list of intended expenses and borrow an adequate amount you can repay on time. Important things to consider include income, financial obligations, and repayment capacity.
Repayment Capacity: A borrower’s repayment capacity largely depends on their income and DTI ratio. Lending institutions expect a high income and low DTI ratio to determine an individual’s loan against property eligibility and affordability.
Keep these factors in mind while selecting the right LAP loan for your needs and make the best use of it. However, ensure timely repayment to build a strong credit history and further improve loan eligibility for the future.
