In times of financial need, the ownership of tangible properties can prove to be a boon. While retaining the ownership of a property, owners can approach lenders for financing by pledging their property through a loan against property (LAP).
The use of property as collateral to avail of a loan is generally a hassle-free experience. Because financial institutions get a guarantee, the probability of loan application rejection is relatively low. However, rejections can happen if a disputed property is offered as collateral for the loan. Or, if you are unable to meet the basic eligibility criteria set by a lender.
To determine the loan amount you are offered, lenders estimate the market price of the property. Taking this valuation and other eligibility criteria, including the credit history, age, income type, and so on, into consideration, the final loan amount is decided by lenders. Generally, you can avail of up to 75% of your property’s market value as finance through a LAP.
Before finalising the loan, it is recommended that applicants check the interest calculations so as to make a more informed decision. Compared with other loans, borrowers are charged a lower interest rate on loan against property, since it is a secured loan.
To check your EMI value and your total interest payable over the course of the loan, use a loan against property EMI calculator. The calculator is a helpful tool is completing complex calculations in quickly and accurately.
What Is a Loan Against Property EMI Calculator?
While taking the decision to apply for a loan, it is always recommended that you take the assistance of an EMI calculator. Servicing EMIs effectively, without defaulting, is always a concern for borrowers. A loan against property EMI calculator helps you calculate the exact EMI, thereby helping you choose the right loan amount, which can enable comfortable repayment on a month on month basis.
With the help of this calculator, you can choose an affordable EMI to repay the loan and estimate the interest amount you will be paying during the repayment of a loan against property.
Important Factors Affecting Mortgage Loan Interest Rate
The foremost factor that affects loan affordability is the interest rate. A lower interest rate brings down your monthly EMI and, ultimately, your overall interest outflow.
While a number of factors affect the interest rate offered to you, one of the important factors that affects your mortgage loan interest rate is the type of property against which you are availing of the loan. For instance, financial institutions may offer different interest rates when applying for commercial property loan in comparison to loans against residential property.
Apart from the property type, the borrower’s profile and the credit history also play a crucial role in determining the interest rate. Borrowers with a higher credit score and a steady income source stand to be offered better rates.
While availing of the loan, also be mindful of the type of interest rate being offered. A floating interest rate for a loan against property means that your interest liability can change during the loan repayment. On the other hand, the interest liability remains the same for the loan period, or till a reset date, if the loan has been availed on a fixed mortgage loan interest rate.
How to Use a Mortgage Loan Calculator?
Mortgage loan calculators are easy-to-use, online tools. There are only a few details that you need to input, such as the loan amount, interest rate, and tenure of the loan, to generate instant results. After inputting said values, you can check the EMI amount, the total interest amount, and the total payable amount.
You can then change the tenure of the loan, property loan interest rate, and principal loan amount and redo the calculation with different combinations till you arrive at one that suits your needs.
Advantages of Using Loan Against Property EMI Calculator
If you are planning a loan against property, using the EMI calculator is a must. Listed below are a few notable benefits of a loan against property EMI calculator.
- Easy to access: These calculators are available on a number of sites. Moreover, they are free to use, which enables you to compute your loan details as many times as you would like.
- Error free: These calculators automate complex equations, thereby eliminating the possibility of human error. More importantly, you get error-free results in a matter of seconds.
- Easier decision-making: With these calculators at your disposal, you can easily compare different offers from lenders and understand exactly how much you extra stand to save or pay with a given lender.
To conclude, an online mortgage loan calculator lets you try different combinations and work out a loan amount and tenor that are best