Loan against Property Interest rates

Every loan seeker is concerned about interest rates they will incur while taking up any loan. The lowest interest rates available in market are Mortgage Loans after Home Loans. But, Home loans are strictly used for the purpose of taking new home.

Loan against Property is a flexible scheme of taking cash in exchange of property mortgage. This ensures complete trust between loan seeker and loan provider because legal property documents are taken into account in this process. This is the only reason why interest rates for loan against property are at such low.

There is not much difference between loan lenders when it comes to the interest rates. You might be unaware of all these things, but comparing interest rates will surely make you stand more clear and able to identify which ones are best according to your requirements and eligibility.

Public sector banks charge interest rates in the range of 12-14%, while Private sector banks have a slightly higher interest rates between 13-16%. Loan approvals and disbursal also take different time for these different sector banks.

There are also private lenders and micro-financiers in the race, to provide Mortgage Loan. But some risk is associated with them because you have to lend your original property papers to the lenders, and if the lenders are not genuine, you might face serious troubles about it. Always, compare loan against Property Interest rates online while taking a loan and choose the best deals for you.

Interest Rates from Banks for Mortgage Loan

These days, you may find every Bank funding extensively for Mortgage Loans or Loans against Property in Indian metro cities. The trend is growing, since Indian economy is growing but the salaries are not been increased with such a fast pace. Also, most of the Indian urban people have roots in rural areas which they leave behind to earn better living and be in world competition for success.

The things the rural people have mostly is a big fat house, farm lands and lot of pet animals to support them in need. Also, people have houses and commercial properties in cities also serve as their investment and on which they can take a Mortgage loan when needed.

Since Loan against Property requires the property papers to lend to the owner or lender, hence this often is an emotional decision. When such people with property and land require loans, mortgage loans are the fairest option they can get. Since the interest rates for Mortgage Loan against property are the lowest after home loans and vary between 10 to 12% interest rates, it is the best option available for customers with instant money requirements.

Varying interest rates are available at various banks for Loan against Property in Pune, such as SBI, the evergreen bank offers lowest interest rate Mortgage Loan, but there are numerous pitfalls also. SBI Mortgage Loan has so many loan applications, that it is often difficult to approve loan even in 3 months tie. Hence other banks such as ICICI, HDFC, Bank of Maharashtra are generally better alternatives in such cases.

What is Mortgage Loan?

A mortgage loan is a secured loan which is taken in return of collateral such as home, shop or land. A mortgage loan is different from home loan and loan against property. All these terms sound similar, but there is a slight difference between them.

A Mortgage means a dead end in foreign countries, so a mortgage loan is derived from the same. If you are unable to pay back loan, your collateral property is taken under by the concerned bank. The collateral property is kept as a security in exchange of the loan amount. Mortgage Loan repayment goes on for years and years, and in case of defaulters, the mortgage providing firm is bound to auction your property to compensate the money lending.

But, there are always smart ways you can take a completely secured mortgage loan. First of all, you should and always check different loan providers for the interest rates that they are offering. The interest rates, vary slightly from one to another, but can impact hugely on repayment installments. A difference in 0.5% interest rate may cost you additional up to 25,000 rupees interest paying.

Generally, Mortgage loan is availed by customers to buy a home may be. Since home loan is not given for 100% property of the loan, so mortgage loan can be taken for instant down payment cash needs. The legal documents of the concerned collateral are to be lending to loan provider. Hence, always check and go for lowest interest rate Mortgage Loan in Pune. India has several PSU and private banks providing Property Loan, as well as private financiers to offer Mortgage Loan to customers.

 

Mortgage loan- Benefits and Drawbacks

Mortgage loan is the best option customers go after if they want to purchase a new home or any real estate. Most of the mortgage loans, borrowed by customer, are for long term. Mortgage loans are of different types. But, they broadly fall in two categories: fixed-rate interest and adjustable –rate interest. Considering your requirement you can select the kind of mortgage loan you want to go for. Following benefits and drawbacks of mortgage loan will help you out.

Benefits
1) Own a home
Mortgage helps you own a home with just paying initial payment i.e. down payment which is minimal of total amount of property. And depending on tenure of your mortgage you will pay rest of amount in monthly installments.

2) Access to cash
If you don’t use your loan you had borrowed for purchasing home, you still have an access to that money for paying tuition fees, medical bills and so on.

3) Decrease in value of asset
Changing market conditions or new norms set by financial institutions may decrease the value of your asset. Still, mortgage amount doesn’t not decrease. You may end up having amount more than that of the value of your asset.

4) Tax Savings
If you opt for mortgage, any kind of mortgage you may end up saving huge amount of money. The interest you pay on mortgage will be tax deductible.

Drawbacks

1) Risk of losing asset
An asset is the assurance or the guarantee for mortgage; it’s pledging to lender that you will repay the loan amount. If you fail to repay amount, for whatever reasons, your asset will be confiscated by lender and, you bound to lose your property.

2) Risk involved in selection of wrong repayment choice
Depending on the options for mortgage, you may not be sure of what kind of mortgage to pick. If you go for fixed rate interest, you have long tenure with fixed amount. Unlike fixed-rate interest, in adjustable-rate you initially have less interest to pay but, upon change in interest rate the amount may increase or may even double which may be not affordable to you.

3) You’ll end up paying more
As in mortgage you have to have an asset as an indemnity and you also carry debt for long period which will end you up paying more on interest rate and you may also risk in losing your property to lender.

4) Penalty and other fees
Each time you take a mortgage you will be charged for that. Also, when you have a mortgage you may also require paying fees for legal work involved. You also will be penalized if you want to get out of Mortgage Loan deal early than you had agreed.