Loan Against Property

Dos and Don’ts while applying for Loan Against Property

When in need of funds, we generally look for resources that can generate income for us. One such resource that can generate credit for you can be your very own property. That too, without breaking a sweat! Yes, Loan Against Property is a low-hanging fruit that can be easily plucked if you own a residential or commercial property. Here, you will need to pledge your property as collateral to avail yourself of the loan. Since it is a secured loan, most lenders will offer 2/3rd of the property value as a loan with attractive interest rates.

Even though it all seems simple, there are a few dos and don’ts you might have to look into before mortgaging your prized possession.

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

Know your need and borrow accordingly

Make sure you know exactly what you need and borrow accordingly. Keep a clear financial plan on what you will do with the loan amount. This way, you can contain yourself from borrowing way more than you need. Borrowing excessively will make you pay a bigger amount as EMIs which can be avoided with proper planning.

Keep your tenure short

Tenure is inversely proportional to EMI. Shorter the tenure, higher will be the interest. It is advisable to keep the tenure as short as possible. That way, you can save a bunch of your money on interest. Use an EMI calculator to estimate the potential tenure and amount you will be needed to pay.

Maintain financial discipline

Being financially disciplined will not only keep your payments organized but can also keep your CIBIL score on the higher side. The concept of “you snooze, you lose” can be applicable when it comes to paying off EMIs. Each time you skip your EMI payment, your CIBIL score will take a toll. So always be on the front foot when it comes to EMIs.

Keep the fine print on your fingertip

Every loan comes with its terms and conditions. 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.

Do not giveaway your original documents

Identity is one of the most essential things one has to safeguard in this digital world. You shouldn’t hand over your original documents to anyone. You will find yourself in troubled waters if your documents end up in the wrong person’s hands.

Do not skip 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. Because skipping EMIs will make you end up paying late penalties and will reflect badly on your credit score.

Do not go over your monthly budget

Your EMI shall not exceed 40 to 50 percent of your monthly income to avoid any financial discomfort. You can also analyze your essential and non-essential expenses before applying for loans against your property to balance your expenses in a better manner.

Chola Loan Against Property

Loan against property is a great option when you’re in need of urgent money. Just make sure you partner with the right lender for you. One such trusted lender you should consider is Cholamandalam Investment and Finance Company Limited. Chola provides quick loans against property to help our customers meet their financial needs with ease. Collaterals ranging from residential properties to commercial ones are accepted in Chola. To avail Chola loan against property, just give a missed call to us at 07949130412. You can also visit Chola Loan against property or reach out to our nearest branch to apply for loans against your property.

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