How to Foreclose Your Loan Against Property Quickly?

Repaying or foreclosing your Loan Against Property quickly is a smart move. It not only saves money on interest but also improves your financial health. This blog discusses strategies and tips to repay or foreclose your Loan Against Property quickly. Read on! 

Tips to Repay Loan Against Property Efficiently

Here are the 4 best strategies to repay or foreclose your Loan Against Property quickly:

1. Prepare a Budget and Commit to It Consistently

Prepare a budget by assessing several factors such as your income, expenditures, and liabilities. Manage your monthly outgo by reducing expenses but not compromising on the necessary expenditures.  A good financial habit will help you save more, which can be used towards repaying your loan.

2. Get a Loan Against Property Balance Transfer

You can also transfer your Loan Against Property to a new lender offering lower interest rates and better loan terms. By availing a balance transfer, you can not only save on your interest payments but also benefit from other perks like low part payment or foreclosure charges.

3. Boost Your Monthly EMI

You can quickly clear your debt by increasing your EMI amount. Use a Loan Against Property EMI calculator and calculate the new EMI amount depending on your desired loan tenure. You may also make a lump-sum prepayment from your surplus funds to reduce the outstanding interest and clear off your burden. 

4. Aim for a Down Payment Ranging from 20% to 30%

It is always recommended to aim for 20% to 30% down payments to get favourable terms. It can benefit you in the longer term by reducing the principal component which as a result will also reduce the interest. This will not only result in lower EMIs but also help you in shortening the loan tenure.

Advantages of Foreclosing a Loan Against Property

There are several benefits of foreclosing your Loan Against Property:

• You Can Save on the Interest

Foreclosing or prepaying a Loan Against Property can help you save a large amount on the entire interest payment. This enables long-term savings and gets rid of debt burden at the earliest.

• Helps Minimise Financial Risks

By foreclosing your loan, you can minimise your financial risk to a large extent. There can be economic turmoil in the future such as interest rate hikes and any other sudden changes which might affect your loan repayment capabilities

• Improves Your Credit Score

Making prepayments improves your creditworthiness as it reflects efficient debt management and financial planning. Hence an improved credit score can help you to avail loans at lower interest rates in the future.

However, please note that lending institutions levy certain fees on prepayment or foreclosure of loans. Hence it is always recommended to check the foreclosure charges on Loan Against Property at the time of availing it.

Also Read - Decoding the concept of Loan Against Property (LAP)

Key Points to Remember While Repaying Loan Against Property

Here are some important things to remember when paying back a Loan Against Property:

• You can set up reminders or automatic payments to ensure your EMI payments are on time to avoid extra fees and maintain a decent credit score.
• Preserve all your loan documents safely, such as loan agreements and any other payment records. These documents can act as proof that you're paying back your loan and can be useful in case of any problems or disputes.
• If you're having trouble paying back the loan, consider connecting with your lender regarding the issue. They might have ways to help, like loan restructuring, or changing your payment plan temporarily.

Also Read - Loan Against Property Vs Personal Loan

To Conclude

Prepaying or foreclosing your Loan Against Property helps you save on the total interest payments, improves your credit score and reduces all other external risks which can affect your repayment capability. Following strategies like sticking to a budget, considering refinancing options, increasing your payments, and making a significant down payment can help you become debt-free.   

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan Against Property disbursal is at the sole discretion of Poonawalla Fincorp.
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