If you require a secure loan with low-interest rates, then your search ends here. Loan against property is among the most secured loans. You can get a loan with a very high value, just by applying it against any property that you own. As you are using your property as collateral, the loan against property interest rates will be low as compared to other types of loan that doesn’t include any collateral.
There are many attractive schemes available online by many lenders. You can choose any of the plans that match your expectations. Also, there are a variety of attractive interest rates for the loan. The interest rates are probably of two types, and also, it highly depends on the size of the loan. Furthermore, you can use the loan against property calculator to calculate the interest rates.
There are multiple other factors that you must keep in mind to avail a loan with a low-interest rate.
So, here’s a detailed list of all the things that you must read before applying for a loan against property:
Important Things to Check Before Applying for a Loan Against Property:
It is one of the most important factors that influence the interest rate. A credit score above 750 is excellent, and any lender will easily grant you a loan with low-interest rates. It is essential to maintain a good credit score to be eligible for the loan.
The property that you are using as collateral for the loan profoundly affects the loan against property interest rates. Depending on the type and condition your property is in, the lender will grant you a loan. If your property is well-maintained, then there are high chances of getting a huge loan with a low-interest rate. Also, the loan against property interest rates varies across different types of property.
- Loan Period
The repayment time of a mortgage loan is comparatively long. Some lenders provide tenure for as long as 15 years. If you choose a longer repayment time, then the EMI and interest rates will automatically get lower.
The lender will have a security that you can regularly pay the monthly instalments. Sometimes, if you choose for a shorter tenure, then the lender may charge a high-interest rate.
- Type of Interest Rate
The two types of interest rates are:
- Floating Interest Rate -The value of the interest rate changes depending upon the market’s variations. But the monthly instalments are fixed. Generally, it affects the loan tenure and the total interest rate of the loan. If you wish to have a shorter repayment tenure, then you can ask your lender to increase the value of your monthly instalments. You will also be able to avail the benefits of RBI repo rates. And, you do not need to pay for any additional charges.
- Fixed Interest Rate – The interest rate of the loan is fixed throughout the loan tenure. It doesn’t fluctuate depending on the market’s variations. If you wish to pay a fixed amount of monthly instalments, then you must choose this option while you are applying for a loan against property. It can be more expensive than the floating interest rate as the lender will not be able to increase the interest rate according to the market fluctuations. You will also not get any benefit of the RBI repo rates. There are some additional charges like the foreclosure and pre-payment charges that need to be considered as well. It is applicable when you wish to repay the loan before its tenure.
These are some of the factors to keep in mind when you are applying for a loan against property. With attractive schemes and interest rates, it is one of the safest and beneficial options. These are really affordable and help you get a huge loan. If you need to know the approximate value of your EMI in advance, then you can check it on loan against property calculator. You can easily use the huge value to cover your expenses. It is feasible for anyone with collateral to get a loan against property. You do not need to panic in case of emergency, apply for a loan against property and be free from all your monetary issues.