Things to Consider Before Taking a Loan Against Property

Things to Consider Before Taking a Loan Against Property

By siliconindia   |   Tuesday, July 29, 2014


Taking a loan is an imperative decision even if it is a small or a huge amount. Most of the people will prefer this loan against property for getting a large amount of money. For this loan you can use your own mortgage as an assurance/guarantee and from this you can get a higher amount than the one you will get from the personal loan. The rate of interest for this loan is quite low as compared to other forms of unsecured loans. In this the interest rate will be 12% to 15.75% this makes more viable. This is a major reason why many loan takers will prefer taking out this loan over other options.

What else you need to consider before taking a loan?

Before opting for a loan there are few things to consider.

Review your credit:

This is the very first thing that a bank will appraise in deliberating whether to sanction a loan or not. The bank will review all the credit scores through CIBIL Based on the credit score the bank will ascertain your repayment capability. In case if you have failed to pay the bill before it will reduce the chances of getting a loan.

Check your ability:

While borrowing money from any source you need to be confident that you can afford the loan and repay the money on time bound. This is especially important for the secured loan, otherwise your property will be at risk if you are unable to keep up your repayments.

Check whether you need income protection insurance:

If you are increasing your borrowing from your property then you need to consider whether you need income protection insurance or not. This is because you are keeping your property at great risk by taking a second loan, you need to find money to recover.

If you are unable to pay the payments, this may lead to lose your job or a source of income. If you are unsure to make your finances stretch better taking income protection insurance policy. Choose the right policy which suits you.

Are you eligible?

It is very essential to check whether you will get the loan or not. This mainly depends on your income, Savings, Debt obligations, Value of property, Track record of other loans like personal loan and financial liabilities. This loan is available for professionals, self employed peoples and government servants. The age should be below 60 years.

By taking loans we can able to buy something today and you can always keep paying later. Taking a loan against property and being addicted to this idea is not so good. Maintain a plan for your finance and increase your income level. Always consider the above points before taking a loan against your property.

 

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