Individuals can obtain a sizeable credit amount for a longer tenor through a loan against property. One of the major benefits of this credit facility is that it can leverage the borrowed capital without any end-usage restraint, like a personal loan. Further, being a secured loan type, they do not have to bear a higher interest charge upon their borrowed credit like an unsecured loan. However, they need to pledge their estates to the lender to avail of this property loan.
Nevertheless, getting a quick loan disbursal becomes a necessity so that individuals can bear their upcoming big-ticket expenses conveniently. Individuals in need to get their credit advance in a quick way need to follow the strategies mentioned below.
Strategies to avail a property loan quickly
Following are the ways that can help individuals meet their financial requirements instantly:
- Enhancing credit score
The credit score is one of the major loan against property eligibility criteria that lending institutions check while approving a borrowing request. Individuals need to maintain a CIBIL score over 750 to fetch a substantial amount from this mortgaged loan. It demonstrates the borrower has a positive record of loan repayment.
Nevertheless, it may not be possible to enhance their credit score overnight. They need to maintain a positive financial discipline, such as repaying timely, reducing overall financial obligations, refraining from many loan requests, etc.
- Applying for a joint loan
Lending institutions approve and sanction joint loan requests quickly because it reduces the risk of delinquency. They know that borrowers will be able to repay the loan amount effortlessly. It benefits a borrower in getting a higher amount as well.
In this regard, individuals can get benefits like concession in loans against property interest rates by including a female as a co-borrower.
- keeping documents ready
Individuals also need to ensure that they make all their necessary papers updated and ready while applying for the credit facility. Else, they may encounter a delay or, in the worst scenario, disapproval of their loan requests.
Following are some of the necessary documents that you need to arrange beforehand to reduce last-minute hassles:
- Income proof: Salary slip, Income Tax Returns (ITR) slip, etc.
- Identity proof: Voter card, PAN card, passport, etc.
- Records of address: Voter card, utility bill (electricity/water bill), etc.
- Copy of property records
Nevertheless, to avail a property loan, individuals may need to provide some other documents at the request of lenders.
- Keeping a tab over the FOIR
Fixed Obligations to Income Ratio (FOIR) is also one of the major aspects that lending institutions check before approving requests for borrowing. It measures the existing loans, credit card bills, or other monthly financial commitments an individual has.
Individuals with FOIR of over 50% can experience declination of their request. To reduce the value of this ratio, individuals need to service their existing loans first. It will enhance their opportunity to avail of the property loan easily.
- Borrowing at a lower LTV ratio
Loan to value ratio (LTV) refers to the loan amount borrowers get against the market price of their mortgaged property. Generally, lending institutions provide LAP at an LTV lower than 80% (varies across lenders).
In a loan with lower LTV, lenders advance a less credit amount, so their risk also becomes reduced. Consequently, they can approve the loan application with less hesitation.
- Accepting pre-approved loan offers
Individuals can also ensure quick disbursement of loans against a property by accepting pre-approved offers. Lending institutions offer these tailored credit facilities on their financial products, such as loans against property and personal loans. It reduces the overall time of the loan process. To check their pre-approved offers, intending borrowers just need to provide their details, such as name and contact information.
Besides knowing the procedure for getting quick approval of your LAP request, you need to know how you can apply for it.
How to apply for a loan against property
Here are the easy steps individuals need to undertake to apply for loans against property online:
Step 1: Visit website of your preferred financial institution.
Step 2: Find the application form for loans against property.
Step 3: Enter your personal details and provide information about your property to be mortgaged.
Step 4: Mention the information regarding your income.
Step 5: Submit the duly filled-in application form.
After this, individuals will get a call from the lending institution’s representative.
Note that the application process mentioned here is indicative, and it may vary across different lenders in India. You can find the actual application procedure by visiting the official website of lenders.
In conclusion, to avail a property loan quickly, individuals need to give an impression that they can repay the borrowed capital conveniently. Since it reduces the overall risk of financial institutions, they approve the loan requests without reluctance.