Major Factors to Consider Before Availing of a Mortgage Loan at a Low Interest rate

mortgage loan emi calculator

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. 

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: 

  • 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 for mortgage loan, 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 home mortgage loan interest rates to such applicants. 

  • 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 rates 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. 

  • 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 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. 

How Mortgage Loan EMI Calculator Works Online:

Willing loan against property applicants can also consider using a mortgage loan interest rate calculator to know their monthly instalments even before applying for this secured line of credit. This online customised 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 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 loan against property EMI calculator will display the monthly instalments for the principal amount, along with total interest payable by the end of 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. 

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 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. 

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.