Loans have become an integral part of our lives. In fact, most people these days are servicing at least one or two different loans. Loans allow us to afford the lifestyle we want without feeling financially burdened. One of the loan types that is gaining increasing popularity in India is the mortgage loan.

What is a Mortgage Loan? 

A mortgage loan is a loan backed by security or collateral. The borrower who avails of these loans essentially pledges a property they own security. If the loan borrower is unable to secure or repay their loan EMIs for a long period, the loan borrower can sell the pledged collateral for recovery of losses. 

Across the world, the term mortgage loan covers all loans that are backed by collateral, including home loans and loans against property. However, in India, the term property loan is often used synonymously with loans against property. 

What is a Mortgage Loan or a Loan Against Property? 

Property owners can leverage the equity locked in their property and avail of a loan against it. Such loans are known as mortgage loans or loans against property. 

However, the same lien also gives the lender the legal right to sell the pledged collateral if the loan borrower defaults on loan repayment for at least six months or more or clears that they won’t be able to repay the loan. Let us now look at some of the benefits and features of these loans. 

Mortgage Loans: Features and Benefits 

1. High Loan Sanction

The LTV ratio ranges from 60% to 70%. This is a high loan amount and therefore, loan borrowers can get access to substantial funds easily. 

In fact, with the right collateral and credit profile, loan borrowers can avail of a loan amount high enough to pay a child’s college tuition fee, cover wedding expenses, buy another property or even start a new business. 

2. Long and Flexible Repayment Tenor

Even though mortgage loans are backed by collateral, in case of a loan default, selling the pledged collateral is not an easy task. 

Therefore, to minimize the chances of a loan default, lenders give borrowers the option to choose their repayment tenor. Further, they also allow borrowers to take up to 18 to 20 years to repay their mortgage loan so that the loan does not begin to feel like a financial liability. 

3. No End-Use Restrictions

Other than mortgage loans or loans against property, there are no other loans in India that give loan borrowers access to such substantial funds without implementing any end-use restrictions on the loan money. This is a big benefit that works in the favour of mortgage loans.

4. Low Mortgage Loan Interest Rates

The biggest benefit of loans against property is that since these loans are backed by collateral, the risk for the lenders is minimal. Therefore, it is not surprising that loans against property interest rates tend to be low. In fact, lenders charge only a slightly higher rate of interest on these loans as compared to home loans, which are the cheapest of all loans. 

Mortgage Loans: How to Apply 

If you are planning to apply for a mortgage loan, here is what the process involves. 

1. Do your research and find out a lender who you trust and find reliable. Next, go to their website and apply for a mortgage loan using the form published on their website. Alternatively, you can also go to their office and apply for a loan in person. Submit a properly filled mortgage loan application form along with all the required documents.

2. Once the lender you have applied to receives your application and the document they need for processing the loan, they will start the process of document and property verification. During this step of the process, your lender will hire legal and technical experts to verify all the documents and the information provided in them along with the property that you plan to pledge as collateral.

3. If you successfully pass through this step of the process, your lender will discuss the terms and conditions of your loan and initiate a round of negotiations either verbally or through the mortgage loan sanction letter. They will conclude this step by sanctioning the home loan offer letter or the final loan agreement.

4. Sign the final loan agreement and wait for your lender to disburse the loan money into your account.

Renewіng your bіke іnsurаnce coverаge mіght be а dіffіcult tаsk, but іt іs crіtіcаl for the sаfety аnd securіty of your two-wheeler. Don’t аllow frequent mіstаkes result іn іnsuffіcіent coverаge or excessіvely hіgh rаtes. 

Thіs guіde wіll brіng you through seven frequent mіstаkes to аvoіd throughout the bіke іnsurаnce renewаl procedure. Whether you’re аn experіenced rіder or new to the world of bіke іnsurаnce, knowing such mіstаkes mаy sаve your tіme, money, аnd frustrаtіon. 

By following these eаsy steps, you cаn guarantee that your bіke іnsurаnce polіcy offers the full coverаge you wаnt whіle sаvіng money on premіums.

Seven Frequent Mistakes To Аvoіd Throughout The Bіke Іnsurаnce Renewаl Procedure

1. Procrastinating the Renewal Process

One of the most common mistakes is delaying your bike insurance policy renewal. Allowing your policy to lapse can leave you without coverage, which is both risky and illegal. Riding without valid insurance can lead to hefty fines and legal issues.

• Renew on Time: Set reminders well before your policy expiration date to ensure timely renewal.
• Check for Grace Periods: Some insurers offer a grace period after the policy expiry. However, relying on this can still be risky.

2. Not Comparing Different Policies

Another mistake is renewing your policy without comparing different options available in the market. Insurance companies frequently update their plans and offer new benefits, so sticking with the same policy without researching can mean missing out on better deals.

• Use Comparison Tools: Leverage online tools to compare various bike insurance policies.
• Look for Discounts: Check if you are eligible for discounts or offers that can reduce your premium.

3. Ignoring the Policy Terms and Conditions

Many riders need to read the conditions thoroughly. This can lead to unpleasant surprises when you make a claim, as you might find specific exclusions or limitations you must be aware of.

• Read the Fine Print: Ensure you understand the coverage details, exclusions, and claim process.
• Ask Questions: Don’t hesitate to ask your insurer for clarification on any policy aspect.

4. Underestimating the Importance of Add-Ons

Ignoring add-on covers can be a significant mistake. Add-ons like zero depreciation, engine protection, and roadside assistance can provide additional security crucial during emergencies.

• Assess Your Needs: Consider the risks and riding habits to choose the right add-ons.
• Opt for Essential Covers: For instance, roadside assistance can be invaluable if you frequently ride long distances.

5. Providing Incorrect Information

Providing inaccurate information while renewing your bike insurance can lead to claim rejections. Whether it’s your details or information about the bike, ensure everything is accurate and up-to-date.

• Double-Check Information: Verify all the details before finalising the renewal.
• Update Changes: Inform your insurer of any changes, such as modifications to your bike or a change of address.

6. Not Reviewing the Insured Declared Value (IDV)

The Insured Declared Value (IDV) is a critical component of your bike insurance. It determines the sum insured and affects your premium. Failing to review or adjust the IDV during renewal can result in inadequate coverage or higher premiums.

• Adjust IDV Accordingly: Ensure the IDV reflects the current market value of your bike.
• Avoid Overestimating: An inflated IDV leads to higher premiums, while an underestimated IDV can result in lower claims.

7. Overlooking Renewal for Specific Models

When renewing insurance for specific models like the Honda Activa, it’s essential to consider the unique aspects of the bike. For instance, Honda Activa insurance renewal might offer specific add-ons or benefits tailored to this popular model.

• Model-Specific Benefits: Check for any special offers or add-ons for your bike model.
• Review Past Claims: If you’ve had any claims, consider how they were handled and if the policy provided sufficient coverage for the Honda Activa.

Conclusion

Renewing your bike insurance policy is more than just a routine task; it’s an opportunity to ensure you have the best coverage for your two-wheeler. By avoiding these common mistakes, you can secure a policy offering comprehensive protection, peace of mind, and savings.