While the pandemic keeps posing newer financial threats with each passing day, it might just be the right time to rely on a secured loan, especially one against the property. However, with a majority of financial institutions working with a limited workforce during the COVID-19, loan availability, especially for personal reasons might be a bit of a stretch. This is where it becomes all the more important to improve your chances of approval by following a more intuitive pathway.
Benefits of Getting a Loan against Property
Before we start talking about the tried and tested techniques to improve eligibility, it is appropriate enough to brush through the diverse set of benefits associated with a loan against property.
- Lower LAP loan interest rates
- Easier to get approved
- Longer tenure for better financial sustainability
5 Ways to Improve LAP Eligibility
Now that you are aware of the existing benefits of a loan against property, you can approach the application process better, to increase your chances of getting approved:
- Consider a Longer Tenure
Although a loan against the property always has a longer tenure for repayment, it is advisable to seek the longest one available in case you are seeking a quicker approval. Banks, HFCs, and NBFCs do check your salary slips and existing income and in case you choose a shorter tenure with higher EMIs, the concerned financial institutions might find it a bit hard to trust your repayment eligibility.
- Try and Fix your Credit Score
While fixing the credit score is a continuous, time-intensive process, you can still try and get it up by strong-arming your financial inadequacies, as quickly as possible. Once fixed, you can get your credit score up within months and improve your chances of LAP approval. In case you already have a decent credit score to show for, you can reduce your credit utilization for improving it further.
- Add a guarantor
Even if you aren’t sure about the credit score or finding it too overwhelming to fix the same, you can improve eligibility by adding a co-applicant or even a guarantor. PNB housing loan against property is one of the few financing options that get approved faster for individuals with co-applicants to rely on.
- Consider Lower LTV Ratios
Secured loans like a loan against property are subject to LTV capping. Although you would always want to project the highest possible LTV considering the higher valuation of the property, lowering the ratio increases the chances of approval as financial institutions are more inclined towards sanctioning a lower requirement. If your credit score is good, this approach might even help you get a discounted lap loan interest rate.
- Reduce FOIR
Here is one of the best tricks to improve your loan eligibility as hardly do we keep a track of the Fixed Obligation to Income Ratio while putting forth loan applications. Financial institutions check your debts and monthly obligations before sanctioning loans. In case you can reduce the FOIR by at least 40 percent by prepaying certain debts, approval becomes easier.
In case you are looking to avail the PNB housing loan against property or a fresh line of credit from any other institution, the mentioned strategies are expected to come in handy, especially during the pandemic