Loan against property is a secured credit, offered against a mortgaged property owned by the borrower. The interest rate levied on such a credit usually stays lower than unsecured loans; moreover, an individual can follow several methods to reduce the loan against property interest rate. These options are discussed below in detail.
Value of the property
Any individual considering availing a property loan should be aware that the value of the real estate in question is one of the main determinants of interest rate. Along with the loan amount that is applied for; the value of a property, its type, etc. are all taken into account while deciding the applicable rate of interest.
Credit score of an applicant
Credit or CIBIL score of a borrower is also checked by financial institutions while deciding on the rate of interest that is to be applied. A score of 750 or above is considered good for mortgage loan approvals, while higher rates can ensure further lowering of interest rate.
Employment details
Employment details are checked by financial institutions to decide the risk factor involved in lending to an individual. Most financial institutions prefer individuals working in Government or public sector, or in any reputed MNC's as they are likely to have higher repayment capability. It ensures a higher chance of repayment of the loan against property within the repayment period.
Potential borrowers should check these factors mentioned above before beginning with a loan against property process so that they get the lowest interest rate possible.
