Every human being dreams of having a dwelling that they can call their own. While it is the feeling of settling down that drives them, it inspires a sense of achievement for others. But with many homebuyers in India depending on home loans, once the initial bliss fades, the EMIs remain.
Periodic EMIs mean that the ability of the assessee to afford another significant outflow is crippled, at least for the next few years. Most homeowners resort to a loan against property (LAP) to meet any unforeseen expense in such cases.
This article discusses factors that influence the loan against property tenure.
What Are The Factors That Influence Loans Against Property Tenure?
Credit Score
Even though you have a mortgage against which you want to avail of a loan, the three-numbered credit score plays a crucial role in determining the tenure, home loan interest rate, and other vital aspects pertaining to the loan. A CIBIL score of 750 or higher would give you a better chance of securing a lengthier tenure for loan repayment.
The Property In Question
Lenders would offer you a feasible loan tenure only after carefully inspecting the property. It includes factoring aspects like property type, location, construction date, current condition, and more. It is natural that property in good condition would necessitate you to lead the charge and choose a tenure of your choice.
Applicant’s age
The closer you are to your retirement age, the lower is your ability to afford a significant outflow. Most lenders believe this, and hence, the applicant’s age is a vital cog in determining the home loan eligibility and tenure. It means that a homeowner in their twenties and thirties is more likely to get a home loan tenure of their choice compared to those in their fifties or later.
EMI
When you decide on a loan’s tenure, the most vital aspect is determining the EMI you are willing to pay. If you can afford a higher periodic outflow, you are more likely to choose a shorter loan against property tenure. Whereas, if you have limited free cash influx, the term will stretch to match the repayment ability.
Job Profile And Other Personal Aspects
While settling down with a feasible loan against property tenure, the lender will look into your current job profile, income tax returns, job location, and several other factors. All of these combine to establish your candidature, and if the lender finds you worthy, they are more likely to offer you the LAP tenure of your choice. In many cases, if the lender is unsure of your future prospects, they may deny you a loan.
Previous Loan Application Rejections
The finance world is an intricately connected place where it takes seconds for lenders to check into your previous loan approvals and their status. Therefore, if you have had multiple LAP rejections, there is a high chance of the lender steering clear or offering you a stringent tenure for repayment.
Choosing A Loan Against Property Tenure Is A Tricky Affair
Since you own a home, you are probably paying an EMI towards a home loan already. Now that you run into a cash shortage and are looking for LAP, it is an additional burden that can have a massive impact on your finances unless you plan the tenure and other aspects meticulously.
Given the importance, we suggest you use our home loan EMI calculator to ensure you understand the best choice for your LAP tenure.
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