Over the years, the credit preference of individuals has changed exponentially. For instance, instead of liquidating savings, individuals are now turning to secured credits, such as loan against property, to address long-term, substantial financial requirements. However, along with credit’s popularity, delinquency rates are also increasing. As per TransUnion CIBIL, the loan overdue of over 90 days in this credit segment rose to 3.96% as of the end of August 2020.
Hence, to avoid such a situation, individuals need to form a systematic repayment plan using a calculator for loan against property interest rate. Besides calculating the total borrowing cost, this financial tool also helps choose the right lender who offers the best interest rate.
Benefits of comparing mortgage loan interest rates using a calculator
A loan against property calculator can help individuals compare interest rates and reap the below benefits.
- It allows applicants to choose a repayment structure that suits their financial standing
- It facilitates better finance management
- It helps one avail the lowest interest rate
Besides comparing the rates using a loan against property calculator, individuals can also follow some other tips to secure the best rates possible.
Tips to reduce loan against property interest
Some of the best tips that individuals can follow to avail the lowest interest rate on loan against property are listed below.
1. Consider the property type
Property loan interest rate depends on the type of property. For instance, a residential property in a good location with modern amenities draws the maximum loan amount and competitive interest rates. Prospective borrowers can use a loan against property interest rate calculator and enter the property details to know the EMIs and net borrowing cost.
2. Select tenor carefully
The interest component and tenor are inversely proportional. In other words, a longer tenor translates to a lower EMI; however, it incurs more interest. Hence, it is vital to determine the ideal tenor of loan against property before applying for this credit.
In this regard, individuals can use a loan against property emi calculator to assess the right tenor for the desired loan amount.
3. Check the eligibility criteria beforehand
While ‘what is mortgage loan’ is a question that most stress on, individuals often forget that eligibility and documentation are equally important aspects. Lenders readily approve loans to those with a good credit score, steady income source, and good repayment capacity.
Prospective borrowers need to submit a list of documents to avail the best deals on a LAP loan; these include:
- KYC documents
- Property documents
- ITR documents
- Bank account details for the last 6 months
Individuals may also need to submit additional documents and meet lender-specific eligibility to enjoy the best rates.
4. Compare different lenders
There are several lenders in the Indian market and choosing the best one can often be challenging. Since the interest rate varies from lender to lender, it is pertinent to choose a lender that offers the lowest interest rate. A lower interest rate translates to a lower EMI and reduces the overall borrowing cost. In any case, you should use a property loan interest rate calculator to derive the EMI and total interest payable.
Selected NBFCs extend high-value LAP loan against a competitive interest rate. You can also choose a flexi loan facility to reduce the EMI burden further. Such institutions also provide pre-approved offers for prospective borrowers, which simplify and expedite the credit application process. These offers are available on various financial products, such as loans against property and home loan. All you have to do to avail one is enter your name and contact number to check your pre-approved offer instantly.
To conclude, a loan against property interest rate calculator helps one chalk out the best repayment option with the lowest interest rate. Besides, it is important to know the charges of your LAP that could increase the cost of borrowing.
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