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Top Mistakes That Can Increase Your Loan Against Property Interest Rates

This presentation highlights the most common mistakes borrowers make that lead to higher loan against property (LAP) interest rates. Despite LAP being a secured form of credit, simple missteps like poor credit score management, incomplete documentation, or failing to compare lender offers can significantly increase the total cost of borrowing. This guide provides actionable tips to avoid these pitfallsu2014empowering individuals to secure better interest rates and manage their financial obligations more effectively. Read Complete- https://www.bajajfinserv.in/loan-against-property-fees-and-interest

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Top Mistakes That Can Increase Your Loan Against Property Interest Rates

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  1. TOP MISTAKES THAT CAN INCREASE TOP MISTAKES THAT CAN INCREASE YOUR LOAN AGAINST PROPERTY INTEREST RATES YOUR LOAN AGAINST PROPERTY INTEREST RATES

  2. Understanding the Importance of Interest Rates A loan against property (LAP) is a secured loan, but that doesn’t guarantee a low interest rate. Your interest rate determines how much you repay over the loan’s tenure. A 1–2% higher rate can translate to lakhs of rupees more in repayment. Identifying what influences loan against property interest rates helps you plan better and avoid unnecessary financial stress. In this presentation, we’ll explore common borrower mistakes that result in higher rates.

  3. Mistake #1: Ignoring Your Credit Score A CIBIL or credit score below 700 is seen as risky by lenders. Borrowers with poor scores often get higher interest rates or even face rejection. Lenders use your credit history to assess your repayment discipline. Common reasons for low scores: Missed or delayed EMI payments High credit card usage Multiple loan inquiries in a short time Tip: Check your credit report at least 3 months before applying. Dispute errors, clear dues, and avoid new debt to improve your score.

  4. Mistake #2: Submitting Incomplete Income or Property Documents Lenders require clear proof of your ability to repay. Missing documents (ITR, Form 16, property papers, bank statements) raise red flags. They may offer a higher rate to cover perceived risks or delays in verification. Incomplete property documentation may also affect valuation, reducing the loan- to-value ratio (LTV). Tip: Keep at least 3 years’ ITR, bank statements, and a clean property title ready.

  5. Mistake #3 – Not Researching or Comparing Offers Many borrowers apply for a Loan Against Property with the same bank they already use, without exploring other options. Every lender has a different risk appetite, rate structure, and special offers. Some may offer lower rates for salaried employees, others for self-employed individuals. Use platforms like the Bajaj Finserv app or financial aggregators to check offers, eligibility, and use the LAP interest rate calculator to compare EMIs. Tip: Always get quotes from 3–4 lenders and read the fine print including processing fees, prepayment charges, and lock-in periods.

  6. Avoid These Mistakes to Get Better Loan Terms Loan against property is a powerful tool, but only if you secure it wisely. Here's a quick recap: ✅ Maintain a credit score above 750 ✅ Ensure income and property documents are complete ✅ Compare multiple lenders and negotiate interest rates Also, don’t hesitate to leverage existing relationships with banks for better terms or ask for a rate match if you’ve received a better offer elsewhere. Getting a lower LAP interest rate starts with being a well-prepared and informed borrower.

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