Many people favor loans against property as a viable funding alternative over personal loans because they fall under the category of secured loans. If you choose LAP, you will have to mortgage the property that a lender would advance your money against.
This loan can cover up to 75% of the entire property value. The LTV that is available for a specific property can be chosen based on a number of factors. Additionally, the applicable interest rates may change depending on a number of variables and from one lender to another.
Existing lenders who must service excessive interest rates can significantly lower their EMIs by choosing a loan against property balance transfer. However, people need to be fully aware of this facility in order to take full advantage of the benefits.
What is a loan against a property balance transfer?
Existing LAP loan borrowers who want to take advantage of improved interest rates and services can transfer their remaining loan against their property balance to a new lender. It enables borrowers to lower both their interest and EMI payments.
Individuals must, however, meet all the requirements for qualifying for loans against property in order to use this facility. Typically, lenders will only accept borrowers with a perfect history of payments for this offer.
A loan against property has various borrower-friendly advantages that people should be aware of in addition to lower interest rates.
Features and benefits of loan against property balance transfer
A loan against property balance transfer has the following benefits:
A balance transfer option significantly lowers EMI payments. Changing lenders could prove to be a smart move and result in significant EMI savings for you. To estimate the monthly payments and overall borrowing costs for a loan against property, utilize an EMI calculator for better understanding.
Competitive interest rate
You can also lower the amount of interest paid by transferring the balance of a loan against property. For instance, a lender charging 6% interest would be a far better option than the one you currently use, which charges 7.25%. And over time, this small difference could result in significant savings on interest payments.
Access to additional money beyond the existing loan is another benefit of moving an unpaid loan against property amount to a new lender. Any financial need can be met by using the fund, there are no limitations. The funds are typically used by people to pay for their child’s education, wedding, travel, etc.
However, the amount of the top-up loan is determined by the transferred outstanding sum. Additionally, there is no additional paperwork that must be submitted in order to use this money.
Flexible repayment options
People can select a tenor when choosing a loan against a property balance transfer based on their ability to repay the loan. Before choosing a tenure, it will be better to consider the EMI payable and interest accrual. Keep in mind that greater interest payouts are attracted by longer tenors and vice versa.
Minimal additional charges
People can also prepay a portion of their loans to shorten the term or ease the burden of their EMIs, depending on what is practical for them. They can also quickly foreclose on the debt and transfer ownership to a different lender. Reputable HFCs enable people to use these amenities without paying any additional fees. However, they ought to take into account the processing fees that must be paid to a new lender.
Once you are aware of the paperwork needed for a loan against property, opening a new loan account with a different lender will be simpler. Before accepting the balance transfer, a lender could, however, in some circumstances merely require a few simple papers. It enables immediate approval and prompt disbursal.
Better debt management
Choosing a balance transfer eventually enables you to lessen the total amount of debt you are carrying. You can track your loan online with some lenders so you can keep track of all transactions. These are some of the most important information about loans against property balance transfers that people should be aware of before starting the procedure.