Critical Dos and Don'ts When Considering a Loan Against Property

Anyone can have fund requirements for business expansion or new product development. And we all know how difficult it is to find the right financier for your financial needs. But if you own a piece of property whether residential, Industrial, or commercial, raising funds shouldn’t be an issue. You may raise funds by mortgaging your property with a financial institution. Such a loan type is known as Loan Against Property.

Loan Against Property is a secured loan granted against the mortgage of a person’s residential or commercial property. The borrower can avail up to 65% of the value of the property once the documents and the eligibility criteria are met. Even though it all seems simple, there are a few dos and don’ts you might have to look into before mortgaging your property.

Let us start with a few things you should do while applying for a Loan Against Property

Borrow Right

When submitting a loan application, you need to share the expected loan amount, tenor and the property details that is being offered as collateral or security.

Read the Most Important Terms and Conditions carefully.

Large Financial institutions have good governance systems and are also regulated by RBI and its ideal that you chose the right lender who are being governed.

These large lenders prepare the "Most Important Terms and Conditions" (MITC) when they give a loan agreement.

All typical loan repayment terms, pre-closure, loan foreclosure, property details , and other conditions are mentioned in the Sanction letter as well and are worded well.

You won't even have to call customer support and wait on hold for the most common questions if you attentively read the sanction letter and loan agreement of such lenders.

Read them out fully and have a clear idea of them. Do not hesitate to discuss your queries with the lender. Without knowing the fine print clearly, you may even end up with an unpleasant surprise.

Choose the right lender.

Choosing a trustworthy lender is essential when applying for a loan. While considering the lender you must consider the history of the lender in business, turn around times for disbursement of the loan and a strong brand with a good presence in your location.

Lenders who are vintaged and are large are the best choices you can take so that your property documents are in safe hands and also you are not exposed to hidden charges.

Maintain a good profile.

Most individuals think its better not to disclose , however this could be one of the reason for rejection as well.

Original Title documents

You need to hand away your Original Title documents to the lender and create the charge before availing the loan. Your title deeds are generally safe if you dealing with a reputed lender and who generally have a large spread across the country. Your title deeds are stored in safe vaults in lockers which are professionally managed by the lender till the loan is closed. You can ask for confirmation any given point in time.

Avoid skipping EMIs

After getting a loan, you will be required to repay them in the form of Equated Monthly Instalments (EMIs). There may be times you will be tempted to skip some of them. But, never give in to that temptation. Skipping EMIs will make you end up paying late penalties and will reflect badly on your credit score. You can decide the right tenure before availing the loan. The tenors are generally between 5-15 years.

Whether you want to finance urgent financial needs, remodel your house, have a dream wedding, or grow your business LAP can be the solution, you just need to utilize it properly.

Wait no more. Check your eligibility for Chola Loan Against Property now and unlock a world of new possibilities! With Chola’s EMI calculator plan your finances effectively by getting a clear idea of your monthly repayment obligation. This will help in budgeting and ensure timely repayments. Additionally, it helps you to assess loan affordability and make informed decisions.