Are you in desperate need of a large amount of money? Do you own a residential property in any Indian city which can be mortgaged to obtain the desired value? If you have such assets, you can look up to loan against property. As the name suggests, a loan against property interest rates is offered when you keep your asset like a residential or commercial property as collateral to secure a loan.
However, before you plan your loan find out the applicable interest rate. Needless to say, you would want to secure the loan at the lowest interest rate possible. Even though it’s difficult to get a good deal, you can gain an upper hand on your loan by working on the below mentioned factors which are considered to determine the applicable interest rate.
> Evaluation of your Property: Every lender evaluates the mortgaged property in order to find the present market value, potential increase in value along with a few other factors to determine the risk of lending. The result so obtained is used to calculate the applicable interest rates. The formula is simple: higher risk of lending attracts higher interest rate and vice versa.
> CIBIL Score: Your CIBIL score too plays a very important role in deciding the applicable interest rates. An applicant with a good CIBIL score is assumed to be more eligible for credit and the risk of lending is generally low. However, a good credit score is only worth it if the applicant's monthly income is equally high. Having a good score is of no use if the applicant has a very low repayment capacity.
> Repayment History: Your repayment history includes all relevant details about your past credits, how much you borrowed, how much time did you take to repay the debt, and how well the repayment was managed. Someone with a good credit history is likely to have good money management skills and hence have a high credit eligibility. Lenders would happily offer them a loan against property at a low interest rate.
> Employment History: Lastly, a stable job and stable source of income is foremost requirement. If this condition is not met, nothing else would matter. So, the lender might also check employment history of the applicant to determine job stability.
Additional Read: 4 Factors that will Decide your Loan Against Property Interest Rates
Alisha Antil is your best financial helper for insurance. She has a vast experience in finance and insurance and provide to you the expert advise in insuring your property and health.
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