According to a recent survey conducted, only 15% of the urban population knows about credit scores and how to maintain it. People only come to know about credit scores and its benefits only if their loans are denied.
Imagine, you apply are falling short of funds for an urgent need and you have nowhere to go. You consulted with your family and friends, there is no concrete reply coming from their side, if they can help you funds or not. Then finally you make a decision to avail a personal loan. You go to your bank and fill out the application for a personal loan, in midst of the verification process, you are brought to knowledge after your cibil score check that the score is low and you are denied a loan. You are completely devastated and are finding ways to get hand on emergency funds.
Out of the blue moon, the banker asks you if you have a property in hand which you can spare. You realize, you have properties in hand and can opt for a LAP. Considering you cibil score being low, there will be questions popping up in your mind. Do you think the bank will provide you a loan against property? How hard can it be as compared to a personal loan? How many days will it take for the processing? The answer to this is a YES! You can avail a LAP with a low credit score.
Let us first understand, the technicality of personal loan and loan against property in the above case,
As mentioned in the above case, going for a loan against property will be more feasible rather than going for a personal loan. As a LAP gives you a lot of time to make the repayment i.e. 15 years, whereas a personal loan only gives 5 years maximum.
When opting for a loan against property, the lender always considers your incomes and gains and the value of property. Even if your cibil score is on the lower side, the lender will not mind that as they have your property as collateral. Usually the loan amount is fixed on the basis of the property’s value and the bank only sanctions maximum of 60% of the property’s value. While you have opted for a loan on property, you can still enjoy all the benefits of the property.
Unexpected accidents can arrive at your doorstep at any given point, you cannot evade them, but on the other hand, you can be prepared for the same by taking all your financial factors into consideration for a better future.