Loan Against Property Interest Rates.
What is the Loan Against Property Interest Rate?
A loan against property is one of the best financing options at a lower rate of interest for dealing with an unexpected financial crisis or meeting significant goals such as home purchase, a child's higher education, or funding a wedding. As the name suggests, the funds offered under this loan are secured by pledging a real estate asset as collateral to the lender.
Mortgage Loan Fees & Rates.
Before applying for a mortgage loan, understand the processing fees, part-prepayment fees, and pre-closure charges. Below is the table outlining these charges.
Applicable Fees and Charges on Loan Against Property.
Whether you require funds to set up a new business or to deal with a medical emergency, Hero FinCorp is always there to financially support you with our affordable mortgage loan. We charge an interest rate on mortgage funding after reviewing various parameters such as your income, occupational status, and the condition of the commercial property in question. So, if you have a regular income and a commercial real estate property in good condition, visit Hero FinCorp now to apply for a loan against property.
INTEREST
RATES
11% - 17%
(Reducing balance interest Rate)
PROCESSING
FEE
Processing fee is 1% + GST
(Reducing balance interest Rate)
FORECLOSURE
CHARGES FOR TOP UP
As per Sanction Letter
(Reducing balance interest Rate)
How to Calculate the Rate of Interest on a Loan Against Property?
At Hero FinCorp, you can choose between fixed and floating mortgage loan interest rates. Here is what these rates mean and how they are calculated.
Fixed Interest Rate.
Under this mortgage loan arrangement, the interest rate is fixed and remains the same till the conclusion of the loan term. A fixed interest rate is charged on the outstanding loan balance, and as the loan tenure passes, you are required to pay a lesser amount towards interest and more on principal outstanding.
You can compute the EMI for a fixed interest rate mortgage loan using the following formula
E = [P x R x (1+R)^N] / [(1+R)^(N-1)]
Here,
E refers to the Equated Monthly Instalment Amount
P stands for Principal Mortgage Loan Amount
R means applicable Rate of Interest
N is the Repayment Period in months
How to calculate Loan Against Property Interest Rate online?
Manual calculations are not very reliable because their results are prone to errors. Therefore, to save time, it is recommended that you use a mortgage loan interest rate calculator. A mortgage loan EMI calculator estimates your monthly debt obligations before you apply for a loan. This calculator can help you determine how much loan you can afford.
This calculator requires you to enter three variables - the desired/approved loan amount, the applicable LAP rate, and the repayment term.
Factors that Influence Loan Against Property Interest Rates in India.
We consider the following aspects while deciding on a loan against the commercial property interest rate applicable to your profile:
Age
You should be between 25 and 75 years.
Property
Location & Condition
Whether residential or commercial, your property should preferably be in a prime location.
Credit
Report
A good credit history with a CIBIL score of 750 or above is preferred.
Income
You should have a stable income to be eligible for a Loan Against Property.
Loan
Amount
Borrow a smaller loan amount to reduce credit risk and secure lower mortgage loan interest rate.
How to get the best Loan Against Property Rate of Interest?
Add
a Co-applicant
If you have an average credit score and meet the lender's eligibility requirements, you should consider adding a co-applicant. A co-applicant could be your spouse or parents with a good income and no previous default history.
Opt
for a Longer Repayment Tenure
You can make your EMI more affordable by choosing a longer repayment period. If you have a low income, extending your tenure allows you to manage your debt without jeopardising your budget, while allowing lenders to approve funds at a lower rate.
Additional
Source of Income
If you have a secondary source of income and are earning a decent and consistent income from it, include it on your loan application. Additional income increases your repayment capacity and qualifies you for a low-interest loan against commercial property.
Clear
Existing Debts
If you have various ongoing debts in your name, you are more likely to have a poor debt-to-income ratio. Before submitting your mortgage application, if your budget permits, foreclose some of your existing loans to improve your debt coverage ratio and qualify for a lower interest rate mortgage loan.
Points to Consider while Availing of a Loan Against Property.
When applying for a mortgage loan, you should consider the following factors in addition to the loan against the property interest rate.
Loan
Amount & LTV Ratio
Check how much financing you can get against your property.
Repayment
Tenure
Choose a tenure that suits your financial planning.
Processing
Fees & Charges
Assess additional costs like processing and prepayment fees.
Eligibility
Criteria
Ensure you meet income, credit score, and property requirements.
Loan
Disbursal Time
Check the processing time for quick access to funds.
FAQs.
Yes, there are ways, such as, making a higher down payment, choosing a shorter loan tenure, or proving your high credit score.
The maximum funding that one can avail on a property is up to 75% of the property's market value. However, it also depends on the borrower's profile, income, credit score, and other factors.
The maximum repayment tenure of a Loan Against Property is up to 10 years, but it may vary depending on the borrower's profile.
Yes, you can still get a low-interest loan if you include a co-applicant on your loan application. Co-applicants can include your spouse, parents, or a close relative. However, ensure that the person you name on your application has a good credit history. Also, inform them that they will be responsible for half of the EMI.
No, a loan against property does not provide any direct tax benefits. However, in some cases, such as if you obtained this loan for business purposes, you may be eligible for tax benefits.
When you choose a floating rate mortgage, the interest rate will fluctuate throughout the repayment period. In contrast, the interest rate on a fixed-rate mortgage will remain constant until the loan is paid off. Managing your EMIs is much easier with a fixed rate because you know exactly how much you need to pay each month towards your debt obligations.
Yes, foreclosure is allowed for a mortgage loan. However, the lender will charge a pre-closure fee on the outstanding debt to compensate for the loss of interest income.
Yes, there are ways, such as, making a higher down payment, choosing a shorter loan tenure, or proving your high credit score.
The maximum funding that one can avail on a property is up to 75% of the property's market value. However, it also depends on the borrower's profile, income, credit score, and other factors.
The maximum repayment tenure of a Loan Against Property is up to 10 years, but it may vary depending on the borrower's profile.
