How to Get a Competitive Loan Against Property Interest Rate

For individuals seeking high-value funds, a loan against property can be the right financial solution. Whether it is for expanding a business, consolidating existing debt, or housing expenses, pledging your residential or commercial property can provide access to a substantial loan amount. The total cost of borrowing depends on the loan against property interest rate.

This article explains how to compare loan against property options and use tools such as the loan against property EMI calculator and the loan-to-value calculator.

What Is a Loan Against Property?

A loan against property is a versatile financing solution where the borrower mortgages a property to access funds. The property to be mortgaged can be residential or commercial. It should also be rightfully owned by the applicant. 

Loan Against Property Interest Rates in India: What to Expect

The loan against property interest rates in India vary based on borrower profiles and lenders’ policies. Compared to unsecured loans, such as personal loans, loans against property come at lower interest rates. 

Factors That Affect Loan Against Property Interest Rates

1. Credit Score

Your credit score is a measure of your credit behaviour. A score of 750 or above is generally viewed positively and can help you secure better loan terms. Maintaining a clean credit history by paying EMIs and credit card bills on time improves your profile.

2. Employment Type

The nature of your employment can also affect the interest rate. Salaried individuals, self-employed professionals or individuals with stable income are generally preferred. 

3. Economic Trends

Market conditions and policies can also influence loans against property interest rates. 

How to Secure a Competitive Loan Against Property Interest Rate?

Here are a few tips to avail of a loan against property at a favourable interest rate: 

1. Review and Improve Your Credit Score

Pay all existing EMIs and credit card dues on time. Avoid multiple credit applications in a short span. Regularly check your credit report for errors and resolve them if needed.

2. Compare Options Across Lenders

Compare loan options from various lenders. In addition to interest rates, consider other charges associated with the loan. 

3. Disclose All Sources of Income

Declare additional income, such as rental income, if applicable, to improve your repayment capacity and increase your eligibility. 

Use of Loan Against Property EMI Calculator

You can use a loan against property EMI calculator to calculate your EMIs in advance. To use the calculator, enter the: 

• Loan amount
• Interest rate
• Repayment tenure

The calculator will instantly display your EMIs. 

Loan-to-Value Calculator: Know How Much You Can Borrow

A loan-to-value calculator is a valuable tool that allows you to check how much loan amount you can qualify for based on your property’s market value. Follow the steps given below to use the calculator:

1. Select your employment type.
2. Enter the property value.
3. Select the property type.
4. Select the tenure.
5. Enter the rate of interest. 

The calculator instantly displays the loan amount you can borrow. 

Securing a competitive loan against property interest rate requires understanding how rates are determined. By improving your credit profile, you can stand a better chance of getting a competitive rate.