When you try something new, there are plenty of things that come to your mind. Whether it is buying something new or applying for a mortgage loan against property. We understand that it is a big decision as there are many lenders out there, and choosing the one that offers you the best rate of interest can be difficult.
Other than that there are various other factors like EMI, loan repayment period and other charges. In this post, we will give you detailed information on loan against property EMI calculator, interest rates and why you should opt for one.
What Is a Mortgage Loan?
A mortgage loan is a type of loan in which you put up your property as collateral against the loan amount. Property loans are secured loans which is why their rate of interest is lower as compared to other types of loans. As for your loan amount, the lender will provide you with a loan amount based on the current market value of your property.
Why Should I Apply for a Mortgage Loan?
Here is a list of reasons why you should apply for a mortgage loan:
- High Loan Amount: As LAP is a secured loan, the amount you receive on the loan is much higher than other types of loans.
- Low-Interest Rate: As your collateral is valuable, the interest rate on a loan secured by real estate is low. Your EMIs will thus be smaller and more manageable than they would be with a personal loan.
- Easy to Acquire: Getting this loan may be simple and quick if you have enough collateral.
- Long Tenure: Our LAPs have a maximum tenure of ten years. As a result, you might pay back your loan without negatively affecting your company’s profitability or cash flow.
What Are the Features of a Property Loan?
Check out the features of a property loan:
- Amount of Loan: Depending on your property’s market value and other eligibility considerations, the amount you get may range from ₹20 lac to ₹8 crores.
- Flexible Tenure: The length of time for LAP repayment might be up to ten years. As a result, it makes it easier for borrowers to pay off their EMIs.
- Who Can Apply: Anyone who wants to borrow money against their property, including commercial entities, service providers, manufacturers, and independent contractors. There are certain other eligibility criteria based on age, residential status, employment status, liability and property value.
- Interest Rate: LAP has an affordable and alluring interest rate.
- LTV Ratio: This percentage can reach up to 75% of the value of the mortgaged property. You will thus receive enough money to achieve your ambitions.
What Is the Interest on a Loan Against Property and What Are the Factors Affecting It?
The mortgage loan against property interest rate is determined based on various factors. Generally, the interest rates are either calculated in the fixed interest rate method or the floating interest rate method. Whichever works best for you. To determine your rate of interest, the lender takes the following factors into consideration:
- Your Profile: Your LAP interest rate is influenced by your age, income, occupation, and place of residence, among other things.
- Your Credit Score: Your credit rating is crucial in setting the interest rate for your LAP. A low credit score is linked to higher interest rates. Maintaining a high credit score is therefore recommended to get a home loan with a reduced interest rate.
- Property Type: Different types of property have varying values. Typically, commercial real estate costs more than residential property. Therefore, a residential property can have a high-interest rate whereas a commercial property might have a cheap interest rate.
- Loan Term: The maximum loan term for LAP is 10 years. The interest rate, therefore, drops as tenure increases. LAP with a longer period, on the other hand, has a low-interest rate.
Once the lender has provided you with an interest rate, you can enter it into the loan against the property EMI calculator along with the loan’s term and decide which option is best for you.
Conclusion
Applying for a mortgage loan against property is pretty simple. All you have to do is visit the lender’s website, check eligibility criteria, fill out the application form, submit your documents, and wait for your loan to get approved.
We strongly advise you to use the loan against property EMI calculator before applying for a home loan to establish your EMI. Knowing your estimated EMI will assist you in making an appropriate strategy for paying the monthly payment without disrupting your monthly budget.
