Optimize Your Real Estate Assets With Loan Against Property
People perceive loans as a huge liability. Aside from marriage, it is probably the longest commitment that people take up. Apart from savvy business owners and investors, most people do not even understand the financial strategy of loans well enough. One of the better strategies available is loan against property. Before analyzing that, it is important to consider some principles of borrowing money that businessmen and investors use to optimize their funds:
1. Stay updated about the aspects of loan process and eligibility criteria that matter.
2. Take each and every effort possible to get the best loan possible. It’d be time worth spent for years to come.
3. Do not sign on the dotted line if you are unsure about any aspect of the loan agreement.
So, how do you use these principles for getting the best loan against property in India ? There are several factors that play a vital role in such an important financial transaction. Here is how you can optimize this loan on each factor:
• Know where you stand and what you want.
If you are taking a loan against property for the first time, this is where you may fall short. You need to understand a few important aspects such as:
1. LTV ratio: Loan to market value of the property
2. Potential criteria for evaluating the cost of the property
3. Suitable repayment strategy
These are very important and can be considered almost non-negotiable. It may not seem to make sense that this list doesn’t include interest rates, but the fact is, after you have taken this loan, these factors will matter as much as loan rates.
• Know what you would be willing to adjust.
You may not find the perfect loan against property in India . In that case, there are certain factors that you will have to adjust with. You should, however, be certain about how much you can adjust. In other words, if the interest suggested by the housing finance company is too high to make comfortable repayments, then you should negotiate it. In the end, ensure that these factors are within your comfort zone. These include:
1. Loan tenure or the loan term offered
2. Pre-payment penalty
3. Interest rate
4. Processing fees and other charges
• Know your finances well enough.
Here are some factors that should be in the best possible condition to provide you with maximum advantage in loan negotiations:
1. Credit score
2. Property documents and evaluation
3. Employment details
The list may seem to be a long one. Keeping these factors in mind though, you can ensure that you get the best loan as per your requirements.
