How To Avail A Loan Against Property On Low Interest Rates

Take a look at the conditions that allow you to avail a loan against property on lower interest rates.

Build And Maintain A Good Credit Score And History
The most effective tip to reduce your loan against property interest rate is to have a good credit profile. When approving a mortgage loan, lenders look at your credit score and history to gauge whether you are financially responsible and will honour the loan in time. While a good credit score of 750 and above can certainly fetch you a lower interest rate loan, a bad score will shoot it up.

This is because a good credit score shows that you have managed and have repaid your past credit on time. By virtue of this, lenders categorise you as a low-risk applicant and are likely to offer you an affordable loan against property interest rate. A bad credit score, on the other hand, creates a negative impact on your credit profile. Missing EMI deadlines or delaying repayment can result in to a low score.

Have Stable And Adequate Financial Means To Repay The Loan
A stable income indicates that you have a regular source of funds with which you can repay all your EMIs on time and without any defaults. This makes you a low-risk borrower that increases the lender’s confidence. This, in turn, results in a lower interest rate on your loan.

Conversely, if you have frequent career breaks or change jobs often, lenders categorise you as a high-risk applicant who is likely to default on the loan owing to a lack of regular income to repay the loan. Typically, lenders expect you to have a work experience of at least two continuous years in the current company. Portraying stability in the form of income and job can win you brownies points as an applicant and result in a lower interest rate.

Maintain Your Property In A Good Condition
By nature, mortgage loans have lower interest rates as compared to unsecured loans. This is because the lender has a right of lien on your collateral, which reduces their risk. This means that even if you default, lenders can still recover your dues by auctioning your property. For the lenders to do so, the property should be in a good condition. A property in a bad condition will put the lenders at high risk as the collateral may not fetch a good sum on auction. Owing to this, when you pledge a dilapidated property, lenders end up charging a higher interest rate on your loan or reject it altogether. Pledge a high-value property and maintain it in good condition throughout the tenor to enjoy low interest rates.

Also Read: Fixed vs Floating Interest Rates

The above are guaranteed tips that can not only get you a loan against property on lower interest rates , it also will help you access other terms of the loan that are favourable to you. Opt for a Bajaj Finserv Loan to access up to Rs.1 crore as a salaried employee and Rs.3.5 crore as a self-employed individual at nominal interest rates. You can also avail this loan on Flexi terms so as to withdraw multiple times based on your needs and pay interest only on what you actually use. Further, the simple loan against property eligibility and minimal paperwork here make for quick approval.