The interest rate is a crucial factor when it comes to borrowing. It affects the overall EMI outflow and thus the loan affordability. A mortgage loan comes at a comparatively lower rate as it is secured in nature. However, one can secure a mortgage loan at even lower interest rates.
Applicants looking for ways to reduce their mortgage loan interest rate can easily compare interest rates and pro tips given below.
5 tips to secure the best mortgage loan at the lowest interest
One can follow these tips to get a mortgage loan at lower interest rate:
Mortgaging the right property
Property type plays a crucial role in determining the loan amount and mortgage loan interest rates. For instance, properties situated at prime locations with modern amenities can help to get a low loan interest rate considering its demand.
However, an old property far from the locality can attract a higher interest rate. Thus, individuals need to pledge the right property as collateral to achieve maximum benefit.
Conduct a thorough research
Borrowers should compare interest rates offered by different lenders and select the preferable one. It will help them check out the best offers and decide on a suitable lending institution. Moreover, a borrower can negotiate with his/her existing lender after comparing the rates across the market.
Maintaining a good credit score
Though secured loans offer lower interest rates, maintaining a higher credit score can help borrowers avail even better interest rates. Preferably, an applicant should have a CIBIL score above 750 to secure loans at lower interest rates.
An applicant can maintain his creditworthiness by repaying his debts on time. Thus, such applicants are considered credible and can negotiate with lenders for a lower interest rate.
Some other factors to consider
Borrowers should always meet the eligibility criteria to apply for a loan against property. It will help them secure competitive interest rates and assured loan approval chances. Moreover, lenders provide various pre-approved offers to eligible borrowers, which can help in streamlining the loan application. An applicant can check his pre-approved offer from the lender’s website by providing basic details like name, contact number, etc.
Opt for refinancing
Shifting one’s loan from his existing lender to a new one can also help reduce the interest rates and the interest outflow levied on the mortgage loan. If a borrower finds a new lender offering lower interest rates than the existing one, he/she can refinance the loan and avail of lower interest rates.
Procedure to apply for a mortgage loan in India
A mortgage loan is a type of secured loan so if borrowers have queries about it application process can take a look at the following steps.
Step 1: An applicant needs to visit the lender’s website and fill out the online application form
Step 2: Next, he should enter personal and professional details as per the requirement
Step 3: Applicants need to fill out their income and financial information to access the applicable loan offers
Step 4: Scan and upload the documents required to apply for LAP with the filled-out application form
Step 5: A representative from the lending institution will verify the documents
Step 6: The entire sanctioned amount will be transferred to the borrower’s account at the earliest possible time
What are the Eligibility Criteria for a Mortgage Loan
To get any loan approval it is essential to qualify for the eligibility criteria that the lender sets. However, these criteria can vary across lenders. Here are some of the eligibility criteria that a borrower should meet while applying for a mortgage loan:
For salaried employees:
Any Indian citizen residing within the boundaries of this country can apply for a loan against property. However, there are certain specifications for a salaried person. They are:
- The age limit should be between 28 and 58 years for a salaried employee.
- The individual should be a permanent employee of a private or public sector, multinational company, etc., for at least 3 years.
For self-employed persons:
- The age limit for a self-employed applicant should be between 25 and 70 years.
- Applicant should be a businessman or self-employed professional with a stable income source.
Several factors affect interest rates levied on a loan against property. Therefore, applicants need a sound knowledge of the required aspects to reduce their mortgage loan interest rates. In addition, one should be aware of the things to know before applying for LAP to get a higher chance of loan approval.