5 mistakes to avoid while taking a loan against property

 All of us face monetary crises at some point in our lives, and during the current financial year, we can say that this is true for most people.

In such times, financial assistance can help us cope with the cash flow challenges, whether personally or professionally. NRI Loan Against Property is one such loan which gives you higher borrowing capacity compared to any other loans, like NRI Housing Loans.

With an NRI loan against property (LAP), you can securely put your residential or commercial property such as a house, flat/apartment, office or a shop for collateral and avail the funds which can be used for any purpose you want, like business expansion, marriage, medical emergencies, etc. However, the property which you are keeping as collateral must be self-owned.

Since LAP involves keeping one of your most prized possessions at risk, you must understand the process thoroughly along with the mistakes that you should completely avoid. 

Some of these mistakes to Avoid while taking NRI Loan against property

1. Not having your pre-requisites sorted

Before applying for the loan, it is necessary to have your requirements sorted along with the documents needed for the same. Lenders take into consideration some important factors like your income, credit history and the present value of the property, to determine your eligibility for the loan.

2. Not comparing the interest rates 

Just like for any other loan, when you’re choosing a lender for your LAP you should compare interest rates and choose the one that offers affordable rates to lower your EMIs.

3. Not thinking about the tenure 

The tenure of a LAP is important as it determines your repayment ability. It is suggested that you don’t opt for a longer tenure if you can afford to repay sooner. Also, a shorter tenure attracts a lower interest outgo amount, therefore, making shorter tenures much more feasible.

4. Not being careful with the paperwork

Don’t ignore or miss out on the clauses that the LAP comes under, as it may contain some important points which may come handy in future.

5. Not considering the disbursal time

While other loans get quick approval and lesser disbursement periods, NRI loan against property takes time to be processed as the lenders take their time to value your property before sanctioning the loan.

Hence, to enquire about the expected buffer time is necessary so that you can match your requirement for funds with the lender’s disbursal schedule and take some additional days accordingly.

 

#6 Not paying attention to your credit score 

Your credit score determines if you’re in the good books of the lenders, hence, you should try to keep your credit score high so that you can get the loan on favourable terms and increase the chances of your application being approved.

An NRI loan against property is a great way of obtaining funds in the times of financial emergencies, especially during a pandemic like this. SBM Bank offers attractive interest rates on the loans with an easy and transparent disbursement process so that you get the best of what you have.