Loans against property, also known as mortgage loans or property loans, are a type of secured loan that individuals avail of against a residential or commercial property or a piece of land. The collateral stays with the lender until the borrower repays the loan in full. After this, the property belongs solely to the borrower and the lender has no legal rights over it.
Like any other loan, loans against property are repaid in the form of EMIs or equated monthly instalments. During the early years of one’s loan tenor, the interest component of one’s loan is much higher than the principal component. Further, since loans against property involve a substantial loan amount, the EMIs should be planned such that it is easily repayable by the borrower.
In this ultimate loan against property EMI guide, we talk about how a loan against property EMI calculator can help borrowers make the right decisions regarding repayment planning and the ideal loan amount for them. So, read on.
What is a Loan Against Property EMI Calculator?
The loan against property EMI calculator is an online, handy tool that property loan borrowers can use to calculate their loan EMIs for their desired loan amount. It calculates one’s loan EMIs based on three values: amount, tenor, and the rate of interest being offered. Here is how a borrower can calculate their EMIs using a loan against property EMI calculator.
- Go to your lender’s website and access the loan against property EMI calculator.
- Enter your desired loan against the property loan amount.
- Next, enter your desired loan tenor and the loan against the property interest rate that you are being offered.
- Once you enter these details, the loan against property EMI calculator will give you your loan EMIs.
If your income allows you to comfortably repay the loan EMI value flashing on your screen, you should go ahead and apply for a loan. However, if you find the EMI value too high or too low, keep changing the values until you arrive at a loan EMI value that you can easily repay. For instance, the Bajaj Housing Finance Loan Against Property EMI Calculator helps borrowers with loan repayment planning.
Let us now share with the readers of this article reasons why they must use the loan against the property EMI calculator.
Benefits of Loan Against Property EMI Calculator
Here are some of the benefits of a loan against property EMI calculator and some crucial reasons why you should use this tool.
- The loan against property EMI calculator tells borrowers their EMI obligation for the loan amount they wish to borrow. Thus, the loan against property EMI calculator helps borrowers decide the right amount and the right combination of loan value and tenor for them. When a consumer borrows what they can comfortably repay, the chances of loan default go down considerably.
- With the help of a loan against property EMI calculator, borrowers can easily do their repayment planning. Before applying for a loan, every applicant can figure out their EMIs. Once they know their EMIs, they can do budgeting to make sure they have enough funds left at the end of each month to cover their loan EMIs. Thus, a loan against property EMI calculator helps borrowers be well prepared and repay their loans comfortably.
- Loan against property applicants can also use this calculator to compare different loan offers. Every applicant should talk to at least a few different lenders. This will give the borrower a clear picture of the best loan against property interest rates and other terms and conditions they can get. They should then use a loan against property EMI calculator to compare these offers and figure out the best one.
- A property loan EMI calculator also helps borrowers determine the right time for prepayment and foreclosure. Both prepayment and foreclosure prove beneficial when opted at the right time. The loan against property EMI calculator gives borrowers an amortisation schedule and by looking at this schedule, applicants can easily figure out the best time for loan prepayment and foreclosure.
- Lastly, a loan against property EMI calculator is quick and accurate and eliminates the chances of errors.
Before we culminate this topic, let us also share with our readers some handy tips on what borrowers can do to minimize their loans against property interest rates.
How You Can Avail Yourself of Low Loan Against Property Interest Rates
- In the case of loans against property, the terms and conditions of the loan depend greatly on the quality of the pledged collateral. High-quality properties that have high resale value attract a lower rate of interest than properties with low resale value.
- Job and income stability matters too. Borrowers with a stable source of income are less likely to default on loan repayment. Therefore, individuals planning to apply for a loan against property are advised to not change jobs and professions often and try to maintain job and income stability.
- Having too many loans increases the chances of defaulting on loan repayment. Therefore, borrowers with a low debt-to-income ratio are more likely to benefit from better loan terms and conditions than borrowers with a high debt-to-income ratio. Loan against property applicants can bring down their debt-to-income ratio by paying off some loans before they initiate their loan against property application.
- Borrowers can also reduce their property loan interest rate by opting for a shorter loan tenor and a lower LTV ratio loan. Both these scenarios reduce the risk for the lender and therefore, in both these cases, lenders may agree to sanction loans on terms and conditions that prove beneficial for the borrower in the long run.
- Lastly, maintaining a good CIBIL score also helps borrowers avail loan at low interest rates. A high CIBIL score, i.e., 750 or above, indicates high repayment capacity and creditworthiness. Therefore, borrowers with a high CIBIL score are also able to avail themselves of a lower loan against property interest rates.
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