Individuals can avail loan against property by mortgaging their residential or commercial property and meet high-end expenditures. After assessing the current valuation of the property, the loan amount is determined. Usually, the loan to value or LTV ratio ranges between 75-90% of the property’s present market value.
Tips to reduce property loan interest rate:
Even though lenders determine the interest rate on mortgage loans, individuals can reduce it by considering the following points.
Interest rates are different for various loan slabs. For instance, the rate of interest on a loan amount of Rs.50 lakh can be lower than in the Rs.25 lakh loan range. Thus, before opting for any loan amount, borrowers need to find a suitable loan quantum to limit repayment liability.
Tenors of a loan directly affect the rate of interest. Shorter tenors come with lesser financial risk for the lenders. Thus, it helps to lower the interest rate of a loan against property.
Various financial organisations offer different interest rates on mortgage loans. So, applicants should look for lenders who offer an attractive rate of interest.
Individuals should not apply for loans from multiple lenders at once since application rejection can decrease the CIBIL score. Consequently, a poor credit score can lead to a significant hike in interest rates for such credit.
Another crucial factor to remember here is that a borrower must ready mortgage loan documents before application.
Also, borrowers should always look for a loan amount that is affordable to them. By maintaining all these tips, applicants can reduce mortgage loan interest rates considerably.