Uncertainties in life can come at any time and financial ones are always unannounced where our savings can also fail. Most of the people create emergency funds while imagining the emergency scenarios but sometimes we do not have enough funds which are needed at that time. In such case, you may ask for credit from your relatives or friends or you can opt a loan from a bank. However, friends and family can help you but not with the desired amount then the best way to deal with such situation is taking a “Loan against property“.

A loan against property is a secured loan to meet your personal as well as business needs by mortgaging your property. The loan can be secured against any residential, commercial property or sometimes agricultural land also. A borrower can get a LTV of 70-75% of the market value of the property. This loan can provides you a larger amount with lower interest rates and there is no restriction on the use of borrowed money.

Understand the Essentials of loan against Property
♦ Interest rate: The rate of interest on loan against property is much lower than other unsecured type of loans as your property act as collateral which assures the lender about the repayment as they have property rights with them. The borrower can also choose from the floating and fixed rate of interest as per their convenience.

♦ Risks involved: In some situation, when you are unable to make the repayments, lender has the right to sell your mortgaged property to recover their outstanding dues from that. Therefore, if you “Apply For Loan against property“ you are always at the risk to lose the ownership of your mortgaged property if you are unable to repay the borrowed amount.

♦ Documents: The papers required to submit or uploaded to avail the loan against property online or offline includes identity proof, address proof, ITR slips, bank statements, property documents in your name, passport size photographs etc.

♦ Eligibility criteria: The eligibility criteria for LAP is same as other loans depending upon the CIBIL score, income, age, qualification, assets and on the organization or employer with whom the loan seeker is working. The loan quantum is only approved when the borrower can meet the set of eligibility criteria set by the particular lender. Once your loan gets approved, the loan money is disbursed either in full or in installments into your provided bank account.

Hence, loan against property is best solution when you need a huge amount of money. It is highly recommended because there is no restriction on the use of borrowed money, from fulfilling your personal emergencies to your business needs, it is just one solution for all. The biggest advantage associated to this loan is you get the funds at comparatively lower rate of interest. It can be availed by both salaried and self-employed professionals and the maximum tenure period for this loan can go up to 15 years depending upon the eligibility and credit profile of the borrower.

Joint home loan is one of the best financial products by lending institution to hedge their mortgage risk. Most of the lenders insist on joint home loan these days, even if the property to be pledged is bought in a single owner’s name. The key advantage of taking this loan is the home loan tax benefits and the other thing that is quite interesting, adding your earning or non-earning spouse as a co-applicant. If you “Apply For Home Loan“ jointly, it makes your repayment capability higher. As every cloud has a silver lining, so do the joint home loan. Let us understand the pros and cons of this loan which are mentioned below:

Advantages of Joint Home Loan

♦ Higher loan quantum: You can apply for loan jointly with your partner, siblings or children to get your loan quantum increased substantially. Every lender sees the borrower’s net monthly income and then finalizes the loan money to be disbursed. Usually, the lending institution would offer a loan on which the monthly installment could be as high as half of the monthly income.

♦ Tax benefits: If your co-applicant is co-owner of house with you, then you can both claim the tax benefits. There is deduction from the taxable income on both the principal repayment as well as interest to be paid, hence, bringing down the overall tax liability of borrowers. Therefore, a home loan jointly allows co-applicants to double the tax deduction benefits from a single housing loan.

♦ Flexible repayment: If you are applying for home loan jointly, it is not necessary that both the applicants have to repay equally towards the principal amount and interest payment. It entirely depends upon the borrower to decide how much each of the borrowers contributes towards EMI.

Disadvantages of Joint Home Loan

♦ Delayed Documentation: As the two applicants “Apply For Home Loan Online“ or offline, so lender will take more time to complete the documentation check. This time lapse occurs as authorities take longer time to ensure that documents submitted by applicants are genuine and not forged. The entire process of document verification is repeated two or three times depending upon the number of co-applicants who have applied for loan.

♦ Impact on CIBIL score: As the joint home loan gives you the advantage of flexibility on repayment but it also have a disadvantage because if any of the two applicants defaults on repayment then the credit score of both of the borrowers would face the brunt as any default on the EMI could negatively affect your credit history.

♦ Divorce or Demise: In case if the co-borrower decides to move out of a loan due to divorce then it is the responsibility of first applicant to repay the whole loan. In other case, if one of the co-applicants passes away then the surviving spouse have to take the charge of repaying the entire loan amount. It is advisable to avail separate life insurance policies to decrease the financial load on one applicant in case of demise or separation.

A stress-free life is a dream of many individuals, where everyone wants their own home outright and pockets full of cash. Well, it is not easily possible but you can achieve this dream just by following good financial habits. One of the easiest ways to achieve your goal is by paying the mortgage and loans with high interest rates faster. Paying off your loan faster will help you reduce your financial burden. Moreover, it will help you to get safe from default so that you do not have to spend on late payment charges.

Home loans are the big liabilities which always stretch from 20 to 30 years for most of the borrowers. During the loan tenure, the borrowed principal amount becomes much more as the huge amount of interest rate is added to it. The home loans have lower interest rate so people often go with a long tenure but rate of interest keeps on adding for a long time which becomes double or even more than the borrowed amount. Therefore, the best way to get rid of this burden is to pay your “Home Loan“ as soon as possible. Here are the possible ways by which you can pay off your home loan faster.

→ Look beyond big banks: Do not choose the renowned financial institutions as small lenders can do the wonder for you. The small lenders may provide you more personalized service and some festive offers as well which may include longer loan tenure, lower interest rates and ongoing fees. Some of the other advantages which one can get with NBFCs and small lenders can be higher lending ratio, minimal documentation and low processing fees.

→ Make frequent payments: Most of the lenders allow frequent payments to the borrower. You just need to check for this while selecting a lender. You can ask for such facility and can make payments after paying the EMI. The interest rate on home loans is calculated on daily basis and making the frequent payments can help you to reduce the burden of interest which you will be paying over the tenure of your loan.

→ Make a big down payment: Making a huge down payment on your home loan reduces the principal amount which leaves you with fewer burdens. It results in paying less interest rate, therefore overall repayment. A big ticket down payment reduces your debt obligation in comparison to other home loans. The repayments become much easier when you have a low principal amount.

→ Home loan refinancing: If you found something more convenient and affordable after reviewing your home loan, the home loan refinancing can help you to grab what suit you the best. Try to negotiate the interest rate with the existing lender or go with a new lender who offers you a low interest rate as it can save you a lot of money. Use a home loan EMI calculator for detailed calculation and to know the total borrowing cost which suits your requirements.

Some quick tips to save money:
• Save sufficient amount of funds to make down payment before you “Apply For Home Loan“.
• Opt for a loan quantum which could be easy for you to repay.
• Pay your monthly installments and credit card bills on time.
• Utilize your bonus or other profits from your investments to make partial prepayments.

Financial goals are the savings, investment or expenditure targets you plan to achieve over a set period of time. The phase of life or the age you’re in usually determines what type of financial goals you wish to achieve. For example, if you’re a teenager, it may be an easy short-term goal like saving for a new pair of branded jeans or something more challenging like saving for a bike. On the flip side, an individual with a growing family would have a long-term goal of going from renting a house to owning his/her own home by taking “Home Loan“. Moreover, saving for a child’s higher education and saving for your own retirement are the other popular financial goals.

How a one can set the financial goals?
Setting the financial goals is not an easy steps, one has to be determined about his/her decision. So, we are there to help you by suggesting some steps to set the financial goals.

• Figure out what matters to you at first. Put everything, from the practical and crucial to the unusual and distant, on the table for inspection and evaluation.

• Examine out what’s within reach, what will take a little time, and what must be part of a long-term strategy.

• Apply a SMART goal strategy on yourself. Make certain that your ambitions are Specific, Measurable, Achievable, Relevant, and Timely.

• Create a realistic monthly budget. Get a strong hold on what’s you saving and what’s you spending, and then work on it to address your goals. Use your budget to plug leaks in your financial boat.

• Your realistic and practical layout and water-tight budget will show at least a handful of leftover money. How much that money is, get it automatically directed into a separate account designed to complete the first couple of things on your list of priorities.

• Monitor your progress with passing time. Ensure yourself that you are hitting the set benchmarks. If not, take some time in that case to re-evaluate what is wrong.

How to achieve the financial goals?
The best way to achieve your financial goals is by making a layout that prioritizes your savings and investments. When you evaluate your own expenses and savings, you’ll discover that some are wide and distant-reaching goals, while others are narrow in aspect. Your goals can be separated into three categories according to time period:

• Short-term financial goals take a couple of months to achieve. For instance, it may include taking a holiday trip, buying a new gadget or paying off a particular debt by taking “Personal Loan“.

• Mid-term financial goals can’t be achieved in a short time and can take too many years to get accomplished. To illustrate, it may include purchasing a dream car, finishing a degree course or certification, or paying off your existing debts.

• Long-term financial goals (more than five years) may take long years to get accomplished and, as a result, they require longer commitments, true determination and often more money. To exemplify, it might include buying own home, saving for a child’s higher education, or for a comfortable retirement.

A loan against property is one of the most popular loans as it is easy to use and can serve as a needful source of financing. Therefore, in order to manage your finances efficiently, you must keep in mind about the charges applicable on your loan against property. It will give a clear picture about the total cost of taking mortgage loan and will help you to layout a budget for the repayment of loan. So, have a look on various charges that are applicable on your loan against property.

Interest rate: The rate of interest is the cost at which the particular financial institution extends credit to you. The calculation is made on the total amount that one borrows for the tenor for which he/she is taking the “LOAN AGAINST PROPERTY“ and interest rate is calculated annually which is added proportionately to every monthly installment.

Processing fees: It is also known as application fees used to cover administration costs, credit check costs and property appraisals and so on. This amount will be deducted from the total borrowed amount before it is disbursed to the borrower.

Charges on statement: Most of the lender will charge you for interest, principal statements as well as loan statements that help you monitor the progress of loam. It is sent to you in the form of hard copy covering the cost of printing and sending them to you. You can avoid such charges by switching to online loan process. One such lender is ShubhBank, which offers digital lending platform and access to all loan related statements at your convenience.

Penal interest: In case you default a loan or fail to make EMI payments, you have to pay penal interest. It is calculated on a monthly basis and charged over and above the interest rate. So, it is advisable to plan your repayment in advance to avoid paying such charges.

Part prepayment charges: If you got a bonus or saved enough to make part prepayment towards the principal amount to repay the loan fast then lender may levy a prepayment charge. Before you “APPLY FOR LOAN AGAINST PROPERTY“ ensure yourself to choose a lender with low or zero prepayment charges to make the most of it.

Foreclosure charges: It involves paying off the entire loan money in one go before the completion of the tenor. Likewise prepayment, foreclosing the loan also attracts a charge too. It is always good to choose a financial institution that has a low foreclosure charge to make repayment simpler.

Secure fee: Some of the lenders impose a secure fee to ensure security for your transactions and sensitive information in a manner they deem necessary. It is done to keep your online account and data safe.

Hence, whenever you are in need of loan against property, don’t choose just by looking at a low interest rate. Therefore, choose a ShubhBank which gives you ample funds at a nominal interest along with unhidden charges when you pledge your commercial or residential property with us.

Owning a home is a dream of every individual and home loan acts as a financial tool that helps one to turn their dreams into reality. However, it is exciting to buy a new house but many end up making mistakes in rush. These mighty mistakes include choosing a wrong lender, unable to understand the terms and conditions, distorted budget plan which is not suitable. It just can cause a lot of stress and financial burden in future if not managed properly. Let’s know about some factors to make your borrowing experience more joyful.

⇒ Manage the Finances: Paying any loan is a commitment so you need to manage the finances well. For such purpose, you need money management skills and financial awareness. Just keep in mind to make a budget and stick to it every month. Moreover, try to save more and track your spending. If you have any investment plan without any profit, you should close it and focus on paying your Home Loan first.

⇒ Ascend up the EMI: However, large EMI may look scary but it will end up in paying your loan faster. The another thing to understand that you may not be aware of, paying low EMI results actually in paying more at the end of loan tenure. To plan your EMI according to your budget, you should use the “Home Loan“ EMI calculator. This will tell you how much you will be paying at the end of the repayment period. It will also help you to save on interest rate.

⇒ Pre or Part Payments: Although home loans are offered at a lower interest rate but still it ends up consuming nearly double of what you borrowed. As mentioned above, it is always better to end up your loan as soon as early you can. You can opt partial or pre-payments whenever you have sufficient funds in your pocket. One can also do with their investments such as fixed deposits, mature RDs. It will either help you to reduce your monthly installments or repayment period. Hence in both cases, you will be saving the interest charges.

⇒ Refinancing: It basically means transferring the outstanding loan amount of previous borrowed amount from one lender to another to get a lower interest rate or flexible tenure options. It is the viable tool to reduce the burden of monthly installments. If any borrower comes across a new lender who is offering lower rate of interest, then he/she can sure reduce their EMI burden to greater extent when going for a balance transfer. If your outstanding amount is too small then it is not advisable to choose Home loan balance transfer because it may end up paying a similar or higher amount as compared to current loan.

There are numerous financial institutions and lenders available in the market to approve your loan. When you “Apply For Home Loan“ it’s your sole responsibility to manage it properly. Therefore, always find suitable deals because a careful decision can lead to getting advantageous fruit for you.