During a financial emergency, one may find it difficult to arrange funds to cover the expenses. However, one can consider the option of applying for a mortgage loan by keeping their immovable assets as collateral with the lowest mortgage loan interest rate.
In this regard, willing borrowers should know the factors to keep in mind in order to get the lowest interest rate on a mortgage loan. Read on to know more about the same.
Top 3 factors affecting the interest rates on a mortgage loan
Here are some of the things that willing borrowers should keep in mind to get the lowest interest rate on a mortgage loan:
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Repayment tenor
Financial institutions consider a borrower as a low-risk applicant if he/she opts for a shorter repayment tenor. Hence, such applicants have the chance to negotiate mortgage loan interest rate with a lending partner.
However, one should keep in mind that a shorter repayment tenor means significantly higher EMIs. Hence, one should choose a repayment tenor that suits their requirements without any financial burden.
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Mortgage loan eligibility parameters
Financial institutions check a borrower’s portfolio and sanction a loan amount accordingly. Willing borrowers should make sure to meet all eligibility parameters, especially CIBIL score and annual income, to get the best deals. Fulfilling all the eligibility parameters for a loan against property gives the lenders an assurance that an applicant will settle the loan within the repayment tenor. Consequently, lenders offer a low mortgage loan interest rate to such applicants.
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Borrowed amount
The loan-to-value ratio is the portion of the market value of the mortgaged property that a lending partner will sanction as the loan amount. Hence, if an applicant opts for a loan amount that is low than the current market value of the mortgaged property, the risks on the lender’s end reduce significantly. Consequently, lenders can offer a low-interest rate to such candidates.
Mortgage Loan EMI Calculator
Willing loan against property applicants can also consider using a mortgage loan interest rate calculator to know their monthly installments even before applying for this secured line of credit. This online customized tool works on the following mathematical formula:
EMI= [P x R x (1+R) ^N]/ [(1+R) ^N-1]
In this formula, EMI stands for Equated Monthly Instalments, where, P is the principal loan amount, R is the rate of interest charged by a lender, and N is the total repayment tenor in months.
User can determine their EMI pay-outs by following these simple steps:
Step 1: Visit the official website of your preferred lending institution and locate the ‘Loan against property EMI calculator’ option.
Step 2: In the tool, enter principal, rate of interest and total repayment tenor in months and click on ‘Calculate’.
Based on three variables provided by an individual, the mortgage loan EMI calculator will display the monthly installments for the principal amount, along with the total interest payable by the end of the loan repayment tenor.
One of the most beneficial aspects of this online free-to-use tool is that it assists willing borrowers in comparing the interest rates offered by different financial institutions. Hence, borrowers can choose a lender that offers the best deals per their financial requirements.
Read More: What are the Benefits of an Area Converter Or Area Conversion Calculator?
How to opt for a mortgage loan in India?
Willing borrowers can follow these steps to apply for a loan against property in India:
Step 1: Visit the official website of your preferred lending institution and locate the ‘Loan Against Property’ option from the product page.
Step 2: Then, locate the application form and fill it up with all the necessary details.
Step 3: Submit all the documents needed to apply for a loan against property as asked by your lending partner and submit the application form.
After all the above-mentioned steps are successfully completed, a representative from the lending institution will get in touch with you to verify all the details. Following this, the lender will disburse the loan amount as soon as possible.
Several financial institutions in our country extend pre-approved offers on secured credit facilities, such as loans against property, home loans, etc. These offers expedite the overall loan application procedure and help in the fast disbursal of the loan amount. Eligible customers can check their pre-approved offers by entering their names and contact details in the required section of the lender’s portal.
In the End
To sum it up, one can consider all the factors mentioned above in order to secure the lowest interest rates on a mortgage loan. This way, a customer can sail through this period without an added financial burden.
