Get Your Loan Against Property Approved in A Quick Way

Introduction to a loan against property

A loan against property is a convenient method of gathering a large sum of money to manage any big-ticket expense. A LAP is a secured loan where the borrower can pledge their property to a lender as collateral to secure a large sum of funding at economical interest rates because the loan is secured and the tenor periods range between 20–25 years, making it affordable to repay these loans. This type of loan is beneficial for borrowers, but it does come with the added risk of losing your property only if you constantly default on your payments and are unable to repay your loan on time.

Unlike other forms of loans, such as a home loan, where the funds you receive are restricted and can only be used for the purpose of purchasing a property. This is not the case for a loan against property because the funds do not have any end-use restrictions and the borrower may use them to tackle any expense they may have, such as business expansion, property renovation, vacation abroad, fees for higher education, or even debt consolidation.

The interest rates are lower in comparison to a personal loan because the loan is secured against the collateral, and banks are less hesitant to offer competitive interest rates because their risk factor is much lower when compared to an unsecured loan. The rate of interest for a loan secured by property ranges between 8 and 10%.

The most beneficial aspect of a loan against property is that the borrower can continue to use the property throughout the duration of the loan, and once the loan has been repaid in full, the lender will transfer the property back to the owner.

You can get your loan against property approved quickly if you follow the points below.

1. Documentation:

At the time of applying for a loan against property, borrowers will have to submit the required documents to verify the borrower’s background and debt capacity. If you have all the required documents arranged and kept in order, then you can avoid the hassle of resubmitting these documents. It is important that you submit all authentic documents because submitting any fraudulent documents will lead to an immediate rejection of your loan.

Here is a list of documents required:

• KYC documents that serve as ID proof, such as Aadhaar cards, Pan cards, passports, and ration cards
• Income-proof documents such as salary slips for the past 3 months and bank statements for the past 6 months
• Proof of address, such as an electricity bill, Aadhaar card, or property tax receipt
• Documents pertaining to the mortgaged property
• Application form completed, along with any other documents requested by the lender.

2. Credit Score:

Maintaining a healthy credit score is an important factor to consider if you want to get approved for a loan against property. A CIBIL score of 750 or higher is considered good, and if you approach a lender with a CIBIL score that is higher than 750, they will more than likely receive a better rate of interest and approve their loan quickly because lenders are looking for applicants who are reliable.

3. Pre-Approved Loan Offers:

A lender will often provide you with a pre-approved loan offer, and these are tailored to the market trends. Accepting one of these pre-approved loan offers reduces the overall processing time of the loan.

4. Fixed Obligations to Income Ratio (FOIR):

A lender will check the borrower’s existing financial obligations, such as any existing loans, credit card dues, or any other expense. A lender will reject your loan if your debt-to-income ratio is greater than 50%. It is in your best interest to clear outstanding dues before applying for a loan against property, as this increases your chances of getting approved for a loan against property quickly.