14.2 C
New York
September 21, 2023
Loan

4 Factors That Will Influence Your Loan Against Property Interest Rate

While it’s true that a Loan Against Property can help you take care of immediate fund requirements, you must always make a note of the interest rate charged by the lender before applying for the same. There are a variety of factors that can influence the Loan Against Property interest rate. Some of the major ones are mentioned below:

Factors Affecting Loan Against Property Interest Rate

  1. Applicant’s profile

Lenders thoroughly evaluate the applicant’s profile before deciding on the loan amount and the interest rate. Thus, lenders will take into consideration your age, city of residence, income source, employment history, debt-to-income ratio, etc., and decide the interest rate.

For instance, if you have changed your jobs frequently or have an unstable monthly income, lenders may charge a comparatively higher interest rate. Similarly, the rate of interest for elderly applicants who are nearing retirement would be higher as compared to young applicants.

  1. Credit score

Your credit score determines your Loan Against Property eligibility and also its interest rate. Since your credit score reflects your creditworthiness and repayment capacity, you must work towards boosting your credit score before applying for the loan. A high credit score of 750 or above can make you a low-risk applicant, consequently making you eligible for a lower interest rate. You can also negotiate with the lender to get favourable terms on your loan if you have a high credit score.

  1. Loan tenure

The tenure of your Loan Against Property also affects the interest rate charged on the loan. Loan Against Property is offered for a long tenure of up to 15 years. The shorter the loan tenure, the higher will be the monthly instalment. However, you will be able to close the loan sooner if you opt for short loan tenure. Keep in mind that the interest outgo is usually higher if you opt for a longer tenure.

  1. Type of property

A Loan Against Property allows you to avail a loan amount by pledging your property as security with the lender. Thus, the type of property pledged as collateral plays a crucial role in determining your Loan Against Property interest rate. The interest rate may vary for residential, commercial, and industrial properties. Additionally, the property’s age and location may also influence the interest rate charged.

Ensure that you take into consideration these factors while applying for a Loan Against Property. Even a slight reduction in the interest rate can reduce your repayment burden significantly in the long run.

Related posts

All-purpose Loan – Loan Against Property

Jake Theodore

How to Get Personal Loan by Using an Aadhar Card

Jake Theodore

How to Fulfill the Bucket List of Your Dreams? That’s Right by Availing an Instant Personal Loan!    

Jake Theodore