India has witnessed a massive reform in her middle and lower-middle-class segment. Accelerated globalisation, reforms and improved demographics powered by the emerging middle class all contribute substantially to the growth in India’s GDP. However, this growth has been coupled with an increase in the expenditure involved in the professional and personal front of individuals.
In an attempt to meet their financial goals, many are preferring to opt for external financing options. While such options help pay for diverse expenses, it also led to a jump in the ratio of household debts by approximately 1.8 times in 2018 from 2017. Such high debts have created the needs for financing options that would help them in debt consolidation.
Consolidating debt allows a borrower to repay a single loan that amounts to a lower interest payment, hence reducing the cost of credit. These also lower the chances of defaults in payments and helps build upon their credit score by foreclosing multiple lines of credits.
Therefore, taking into account debt consolidation and how it helps, it is ideally imperative to avail a loan that would come equipped with features like no end-usage restrictions.
Based on this list of requirements, loan against property India is considered ideal. Despite the ease of access to considerable funding accompanied by the nominal requirements to avail it, one should necessarily gather on how to consolidate a debt before availing such advances.
How To Consolidate Your Debts Conveniently?
A majority of borrowers now opt Loan Against Property for debt consolidation because the host of benefits it has to offer.
However, since availing credit is a crucial financial decision, borrowers need to carefully follow some essential steps before availing a loan to consolidate their debts. These include –
Step 1: Calculate the total debt involved
Since loan against property India is a secured advance, it is necessary to calculate the loan to value disbursed against the property. Lenders can disburse up to 75% of a property’s value as a credit to eligible applicants. Despite this, potential borrowers need to calculate their total debt and hence request for a suitable credit amount that is not more than what is required.
Step 2: Look out for lenders offering a suitable interest rate
Choosing a lender involves checking up on their offered rate of interest that assures the potential borrower of a reduced EMI and cost of the loan. Such pocket-friendly instalments are necessary for long-term credits such as a loan against property.
Step 3: Check out the involved EMI
Consolidation of debt is targeted at ensuring easier and affordable monthly instalments that would not pile on your current financial obligations.
Thus while comparing lenders, remember to use EMI calculators and determine the payments by providing –
- Rate of interest
- Loan amount
- Chosen loan against property tenure
Look into your FOIR and ensure that it is well within 30%. Following this, avail an advance that provides convenient payment options.
Step 4: Meet the required eligibility criteria and documentation
After selecting a lender that fulfils your financial requirements, you should check out the loan against property documents required –
- Address proof.
- KYC documents.
- Latest salary slip.
- Bank account statement of the last 3 to 6 months.
- IT returns.
- Copy of ownership documents of the mortgaged property.
Essential loan against property eligibility –
- In the age bracket of 25 to 70 (self-employed) or 33 to 58 (salaried) borrowers.
- Indian resident.
- Possess a regular source of income.
In addition to such hosts of benefits, reputed financial institutions offer feature-rich Loan Against Property against a competitive rate of interest.
They also offer their existing customers pre-approved offers that ease the application process to avail financial assistance. These offers are available on numerous financial products including home loans, personal loans, business loans, etc. You can take a look at your pre-approved offers by providing a couple of essential details.
Step 5: Avail the loan and repay your additional existing credits
Having compared the best loan against property features offered by your chosen lender all that you need to do is follow a streamlined application process. It involves –
- Visiting the site of the lender
- Filling in the online application form and submitting the same
After the approval and disbursal of the sanctioned credit amount, borrowers can withdraw the required amount and use loan against property amount to foreclose multiple existing credits.
A step-by-step approach to debt consolidation followed by foreclosure of the additional loan accounts ensures that individuals need not remained involved in the hassle of multiple EMI payments.
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