5 Factors that Impact your Loan Against Property Interest Rate

5 Factors that Impact your Loan Against Property Interest Rate

The interest rate is one of the major aspects to watch out for, while opting for a loan against property. 

Substantially lesser rate of interest compared to unsecured loans and a considerably higher loan to value make loan against properties  the favourable option, when in need.

Both salaried and self-employed individuals can avail loan against properties by mortgaging an asset to the lender. 

Trustworthy NBFCs offer Loan Against Property at a competitive interest rate and process loan applications swiftly post meeting simple eligibility criteria.

So, if an individual is applying for a Loan Against Property, one of the most prime factors he/she should be aware of is the interest rate. Well, a lower loan against property interest rate indicates a low EMI and vice versa.

Some other factors that affect the loan against property interest rates are:

1.    Personal Income

Loan against property rate India depends a lot on a borrower’s income. 

Lenders tend to give preference to individuals with higher personal income and financial stability, since good salary assures timely repayment of the loan.

2.    Credit History

A good credit history tends to cut down the Loan Against Property Interest Rate. 

Lenders generally prefer applicants possessing estimable credit score reflecting past repayment history.

3.    Alliance with the Financial Institution

A well-established track record can influence lenders to reduce interest rates charged against a loan. 

In case the borrower has an old financial relationship with the lender, the latter stays pacified about the credibility of the former.

4.    Employer Brand

Lending institutions are ready to negotiate loan against property rate of interest when the borrower has a stable source of income. 

Working for trustworthy brands accounts for the borrower’s job stability, just what lenders look for.

On the contrary, a person lacking such job stability incurs higher rate of interest while availing a loan.

5.    Inflation

Inflation in the national economy can show a direct impact on the rate of interest. With the rise in inflation, the rate of interest rises, whereas, in case of deflation, the opposite happens.

Additionally, several external forces like government monetary policies may cause fluctuation in the interest rates.

It is a necessity to consider all these factors before one applies for a loan against property.

Opting for a loan against property has other benefits as well:

I.                  High Finance Loan

To furnish all kinds of expenses, loan against property comes with a loan amount of up to Rs. 1 Crore for salaried individuals and Rs. 3.5 Crore for self-employed.

II.               Long Repayment Tenure

With a long tenure, borrowers can select a customised period to repay the loan conveniently. Additionally, one can also part-pay or prepay loans anytime at marginal fees.

III.            Easy Balance Transfer

Some NBFCs allow borrowers to transfer their existing loan against property from prior institutions with a high top-up value loan.

Additional Read: Is it smart to invest money from a Loan Against Property?

IV.            Hassle-Free Loan Disbursal

Loan against property documents required during application are KYC documents, address proof, and bank account statement for previous month. 

Furnishing these can facilitate fast sanction and disbursal of your loan against property.

What are the eligibility criteria for a loan against property?

●      An individual with a stable job should range from 33 to 58 years whereas the self-employed should be between 25 to 70 years.

●      Borrowers must have their assets in the cities listed by lenders’ forums.

Loan against property interest rate has made it a feasible financial alternative as compared to other means of financing. 

With so many benefits at your disposal, negate your monetary crisis with a Loan Against Property from trustworthy lending institutions.

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