Every prospective borrower wishes to avail a high loan value against an attractive rate of interest. Contrary to popular belief, individuals can secure an attractive property loan rate interest rate by creating strategies around the factors that influence it.
These pointers highlight some of such portent factors –
Ahigh property loan amount comes with a high-risk factor, which is why financial institutions may provide such credit against a high rate of interest. This is why financial experts suggest individuals apply for a loan value only up to the amount they can repay conveniently.
Acredit score helps financial institutions determine the creditworthiness of an applicant. As a result, applicants with a CIBIL score of more than 750 are preferred by lending institutions. You can thus take necessary measures to improve credit score such as by paying off debt in time and maintaining a credit utilisation ratio below 30%.
Interest rate type
Both fluctuating and fixed interest types have their set of merits and demerits that tend to influence borrowers’ loan burden. Typically, floating interest rates keep changing as per the market trends and affect a borrower’s interest liability. On the other hand, a fixed rate remains unaffected by these factors, but is, nevertheless, marginally higher than floating rates.
Individuals can further use a property loan calculator to assess other aspects like loan tenor that affect the overall interest burden.
Down payment amount
The amount paid as a down payment also impacts loan against property interest to a great extent. Generally, a higher down payment helps to lower the debt burden significantly as it allows a borrower to negotiate for better rates.
Depending upon their repayment capability and financial standing, borrowers must tweak these strategies in their favour. In turn, it will help them to secure a better property loan interest rate easily.