A loan against property is borrowed by pledging commercial or residential properties to meet an individual’s substantial financial requirements. As a secured loan, the loan against property interest rate is low compared to other financing options. The interest rate will determine the EMI amount and, therefore, the loan affordability.
Though interest rates vary on multiple factors like the property kept as collateral, loan amount, tenor, etc., applicants can avail lower interest rates by following certain easy tips. These are listed below.
Tips to get the best interest rates on LAP
Before proceeding, individuals must compare the property loan interest rates offered by different lenders online. It will help them select a suitable lender for the LAP. One can consider the following tips to avail lower interest rates:
- Applicants with a higher credit score (preferably over 750) are in a better position to negotiate with their lenders about reducing the property interest rates.
- Many lenders often offer interest rate concessions during festive seasons. Keeping track of it can be helpful. In addition, one can look for various pre-approved offers that are available on multiple financial products, such as home loans and others. These offers enable applicants to avail of additional deals on the interest charges. To check the pre-approved offers, individuals have to submit the name and contact details.
- The longer the tenor, the higher the interest will be. Hence, it is advisable to opt for a shorter tenor.
- One can calculate the interest rates offered by new and existing lenders and make significant savings by opting for a balance transfer. Individuals can move on to new lenders and avail of loans at comparatively lower interest rates.
Factors affecting the loan against property interest rate
Every individual must consider the following factors before applying for a property loan:
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Type of property
Interest rates vary according to the type and age of property subject to mortgage. Besides, location also plays a crucial role in determining the loan amount and interest rate against a property. For instance, lenders will offer the best value for a commercial property located in the heart of a city rather than a residential property in the outskirts.
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Credit score
A credit score is one of the essential factors that can affect the interest rate of a loan against property. Every individual should have a CIBIL score of 750 or more to avail of a LAP at suitable rates. Thus, when a lender opts for risk assessment of a borrower’s credit file, profiles with higher credit score gets perks like customised offers and lower interest rates.
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Borrower’s profile
An individual’s age, occupation, monthly income, residential area, etc., determine the interest rates for LAP. For instance, a lender generally charges higher interest rates for self-employed borrowers than a salaried person. This is because a salaried employee holds a stable income and is considered more secure. Moreover, employees close to retirement are charged higher interest rates than those with more working years.
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Loan tenor
The EMI and loan against property interest rate of an individual are also affected by the loan tenor. An individual opting for a long tenor needs to pay low EMIs, but it turns out to be a long-term commitment. However, borrowers planning to choose a short tenor should remember that it will make them pay a higher EMI amount. Some financial institutions can ask for higher interest rates if one opts for a shorter tenor.
To assess the ideal tenor of a loan against property, one can use the online loan against property calculator on the lender’s website.
Procedure to apply for a loan against property online
Borrowers can easily compare and apply for a loan against a property following these easy steps:
Step 1: Applicants need to log in to the lender’s official website and fill out the application form.
Step 2: Once an applicant submits the form and all the necessary documents required for loan against property, a representative will get in touch within 24 hours for property verification.
Step 3: They provide the loan approval confirmation after successful verification of the property.
However, applicants must fulfil the eligibility criteria for a hassle-free approval procedure. After all the mentioned steps are covered accordingly, the sanctioned loan amount will be credited to the borrower’s account at the earliest.
Summing Up-
Different kinds of property loans are offered by several reputable financial institutions at affordable interest rates. Before applying for a loan secured by property, one should be aware of the things to take into account.
To make the loan application procedure simpler, these reputable financial institutions now offer pre-approved offers. These deals are offered on a variety of goods, including mortgages. Borrowers can check their pre-approved offers by entering their names and contact details.
Borrowers looking for the best offer on loan against property interest rate should have a credible profile in the first place. Applicants looking for loans against property for attractive interest rates can follow the above-mentioned tips.
