Afinance offering via which you can get ample funding is the loan against property (LAP). Since it is backed by a high-value asset, the property loan interest rate you get is competitive. This rate is influenced by several factors and knowing them can help you secure better terms and more affordable repayment.
What is LAP?A loan against property is a mortgage loan in which you leverage residential or commercial real estate you own to raise funds. It is a secured loan and you get funding up to a percentage of the market value of your property.
Here are some factors that affect your property loan interest rate.
Credit score: Your credit score is a 3-digit summary of your creditworthiness and scores of 750 and above are ideal. Lower scores may attract higher interest rates.
Borrower’s profile: Factors like occupation and age affect the property loan interest rate. For instance, a salaried professional with only a handful of working years left could be charged higher.
Property status: Interest rates differ for residential and commercial properties. Age, location, civic amenities, upkeep, and condition also affect the property’s worth.
Loan amount: You normally get 40-80% of the property’s value as loan. Taking less reduces the lending risk and hence, the interest rate.
Loan tenure: Short tenures may make the EMIs too high and increase lending risk.
Additional Read : Factors that Decide Your Loan Against Property Interest Rates