Loan Against Property: Interest rate and repayment tenor are the deciding factors - Loan Trivia

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Thursday 14 October 2021

Loan Against Property: Interest rate and repayment tenor are the deciding factors

 

loan against property

A loan against property is a secured financing option. Therefore, lenders charge a lower loan against property interest rates, making affordable repayment instalments (EMIs). 

However, the tenor of a loan is invariably related to the interest outgo. Below is discussed how interest rate and repayment tenor are interlinked and hence are two deciding factors of loan against property.

  • Interest rate

The secured nature of mortgage loans enables lenders to levy a lower interest rate. For instance, if individuals secure a mortgage loan of Rs.50 lakh at an interest rate of 8% for 20 years, EMI would be around Rs.41,000. On the other hand, if individuals secure a loan against property at a 6% interest rate for 20 years, their payable EMI will drop to around Rs.36,000.

Here, one must remember that the interest rate also depends on credit profile, property status, etc., which decide the loan against property eligibility.    

However, individuals can use a loan against property interest calculator and get more information. 

  • Repayment tenor

Interest rate and EMI plays a crucial role in deciding the tenor. Mortgage loans usually come with a tenor of up to 30 years. However, individuals apply for  loan against property without income proof should choose the repayment option carefully. 

One must remember, the longer the tenor, the lower the EMI. However, it increases interest outgo. Here, one can use a online loan against property EMI calculator and see results with various inputs. 

Now that individuals know the deciding factors of a mortgage loan, they can apply for the same after meeting the eligibility criteria and submitting a loan against property required documents. 

Individuals can easily find the best possible deal by knowing the relation between loan against property interest rate and repayment tenor.

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