5 Steps to Choose the Ideal Lender for Loan Against Property
In life, we face numerous instances, when we need or desire something, but don’t have the necessary means to achieve the same. It is at such times that Loan Against Property proves to be helpful. To procure this loan, the borrowers must mortgage their property as collateral to the lender. This type of loan is usually taken to meet the monetary requirements for the following purposes –
- Renovation of home
- Personal purposes such as marriage, education, and others
- Setting up a new business
- Expansion of an existing business
- For immediate working capital requirement
- Purchase of machinery or equipment
The property given in as collateral must be owned by the borrower and should be either of residential, commercial or industrial. The ownership of the property should be clear and there should be no legal issues either.
Loan Against Property is preferred by a vast majority of people for more than just one reason. These include –
- Long repayment term (Loans available for tenure upto 20 years)
- Low-interest rates (Rates starting 8.75%)
- Higher Loan-to-Value or LTV (LTVs go upto 85% of property’s value)
- Flexibility to use the funds for various purposes
Given its significance, it is important that you take your time and effort to search for a lender that best suits your needs, and offers you an attractive loan proposition. We know, this may be easier said than done, and therefore, MyMoneyMantra has consolidated the process of finding the ideal lender in 5 simple steps.
1. List Down Your Expectations
To begin with, it is always good to have a rough idea of what you expect from your loan regarding the interest rate, loan amount and tenure. If you wish to enjoy numerous alternatives, cheaper interest rates, personal attention and service, we recommend you look for a lender that closely matches your profile.
However, before you make the final call, be sure to draw a comparison between multiple banks and their offers to see whether you are headed in the right direction.
2. Look for Distinguishing Qualities
Most of us would pick a lender who offers the best interest rate. However, to ensure that your long-term loan comes with specific benefits, you must look for several features that distinguish a good from the rest.
To start with, see if a lender has earned a reputation for being honest and helpful. Next, make sure that they offer sound financial advice, and aren’t there to impose the loan on you. So that you’re confident about the obligation that you are getting into, it is imperative for your lender to be considerate enough to answer all your queries and resolve your doubts. Hence, look for these qualities as well.
Then again, you want a lender who is candid enough to point out your application’s shortcomings and assist you in mitigating. Also, your lender must be willing to discuss the pros and cons of your loan choices, so that you are not susceptible to any unwanted surprises in the long run. In a nutshell, you ought to find a lender who can be trusted with sound financial advice.
3. Ask Around for Suggestions
While visiting banks and brokers physically and going through their websites online are great ways to start your search for a suitable lender, sometimes word of mouth from a friend can also prove to be helpful. Hence, approach any friend or relative who has opted for a similar loan in the recent past, and ask them about their lender. In case you get an excellent review, you can always adopt the same route, without going through the trouble of finding a new one. But remember, your requirement and profile will be unique and might be very different from your friend.
Moreover, if you end up getting negative reviews on one or more lenders, it will be easier for you to strike them off from your list. One may call it old school, but from what we understand, this is one of the most efficient ways of finding a lender that you can entrust with your property and expect a good deal.
You can also ask your friends, colleagues or relatives, who have purchased a house recently, about their lenders. Getting a referral from your peer group can help you cut through the sea of prospects to find someone you know you can trust.
4. Conduct a Background Check
Even if you’ve zeroed in on a lender, after a promising review from a trusted family member or friends, it is always advisable to conduct a further check. You can do so by
- Getting in touch with past clients of the chosen lender
- Checking online reviews
- Analysing the lender’s website
- Asking questions from the potential lender about your doubts
- Getting advice from a neutral Home Loan specialist or financial advisor.
This will help you in finding discrepancies, if any, well within time, and you won’t end up regretting your decisions later.
5. Analyse the Costs Involved
Right from the interest rates, to the various alternatives such as loan disbursal, prepayment, and foreclosure, every aspect of a loan is tied to specific charges. These are usually applied as a percentage of the amount of loan sanctioned. As you must have understood, you must look for a lender which levies the minimum possible costs, so that you can save some extra money.
Now that you’re aware of the process that can help you find an optimal lender for your loan requirements go ahead and kick-start your search. After all, the faster you start your hunt, the quicker your dreams will turn to reality!
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.
Talk to our Loan Specialists toll-free at 18001034004 to know more about our products and offers.