Loan against property is an accessible credit tool that leverages property for immediate funds. From funding your child’s education to taking your dream business onboard, loan against property or mortgage loan addresses one’s needs.
Among the host of lenders available in the commercial market, choosing the most viable lender can be a tiresome and cumbersome process.
To assist you on this further, let’s delve into some vital golden points that can guide you in choosing the best mortgage loan for your needs.
Loan Against Property: Insight
Loan against property or mortgage loan is a credit that is furnished to the borrower for the property they pledge. Unlike personal loans, mortgage loans involve security, which is the collateral pledged. Hence the mortgage loan interest rates are lower when compared to personal loan interest rates.
Although the property is pledged as collateral, the ownership remains with the borrower. Only in situations where the borrower fails to repay the loan does the lender claim the collateral.
Among the various loan options available in the market, loan against property stands as a popular choice because of the following reasons:
- Mortgage loan interest rates that are feasible
- No prepayment charges
- Easily accessible
- Flexible repayment tenure
- Affordable EMIs
- Minimal documentation
Lenders like PNB Housing Finance Ltd offer its customers flexible repayment processes with affordable interest rates through their PNB housing loan against property.
Besides being a credit tool that provides high LTV, the overall documentation and processing involved in mortgage loans are hassle-free.
Critical Points for choosing the best mortgage loan
- CIBIL Score
Your CIBIL scores are a reflection of your credit health management. Any scores less than 620 are considered low for a mortgage loan application. Hence to get the best mortgage loan and feasible interest rates, it is advised to improve your CIBIL scores.
However, lenders like PNB Housing Finance Ltd offer loans for less than 650 at interest rates starting from 10.15%.
- Loan To Value
Loan to Value ratio determines the ratio of the loan sanctioned to the value of the asset pledged. Although the asset value percentage is approved as a loan, it is advised to compare various lenders before making an informed decision. The higher the LTV for your property, the better will be the amount sanctioned.
- Interest rates
Since there are many lenders available in the commercial market, comparing the loan against the property’s interest rates can help you settle with the best option.
- Repayment options
Choose a lender that gives the most flexible repayment options and offer:
- Higher tenure period
- Charges for late prepayment, foreclosure, and processing should be less.
- Customer reviews
Reviews speak volumes about the lender’s service. Before finalizing any lender, it is advisable to learn about the customer satisfaction ratio.
Loan against property is one of the most accessible loans that one can choose. With the right lender, applicants can receive a high loan-to-value for the collateral pledged at affordable interest rates.