Loan Against Property Interest Rates

Bajaj Finance offers loan against property with interest rates starting at 9% p.a. The interest rates may vary depending on the lender's evaluation of your credit profile and risk assessment. Factors such as the loan amount, repayment tenure, and the type of property used as collateral can also influence the interest rates.

Whether you are looking to fund a business expansion, manage personal expenses, or consolidate debts, Loan against property provides a versatile and cost-effective solution. Plus, with flexible repayment options and substantial loan amounts, you can leverage your property's value to achieve your goals without liquidating your assets. Get loan of up to Rs. 10.50 crore against your property within 72 hours* of the approval.

Loan Against Property Interest Rates (Floating)

Loan against property interest rate (floating) for salaried and self-employed professional borrowers

Current Loan Against Property Interest Rates

**The option of switching from floating to fixed rate of interest and vice versa would be applicable only to Borrowers whose loan qualify as personal loan as per RBI circular on Reset of Floating Interest Rate on Equated Monthly Instalments (EMI) based Personal Loans- RBI/2023-24/55-DOR.MCS.REC.32/01.01.003/2023-24.
Personal loans refers to loans given to individuals and consist of (a) consumer credit, (b) education loan, (c) loans given for creation/ enhancement of immovable assets (e.g., housing, etc.), and (d) loans given for investment in financial assets (shares, debentures, etc.).
Further, Consumer credit refers to the loans given to individuals, which consists of (a) loans for consumer durables, (b) credit card receivables, (c) auto loans (other than loans for commercial use), (d) personal loans secured by gold, gold jewellery, immovable property, fixed deposits (including FCNR(B)), shares and bonds, etc., (other than for business / commercial purposes), (e) personal loans to professionals (excluding loans for business purposes), and (f) loans given for other consumptions purposes (e.g., social ceremonies, etc.). However, it excludes (a) education loans, (b) loans given for creation/ enhancement of immovable assets (e.g., housing, etc.), (c) loans given for investment in financial assets (shares, debentures, etc.), and (d) consumption loans given to farmers under KCC. For risk weighting purposes under the Capital Adequacy Framework, the extant regulatory guidelines will be applicable. (as defined in XBRL Returns – Harmonization of Banking Statistics-RBI/2017-18/117-DBR.No.BP.BC.99/08.13.100/2017-18)

Since a mortgage loan is secured by a high-value asset, that is, a residential or commercial property, loans against property interest rates are usually economical. However, lenders do not offer the same property loan interest rates to all borrowers uniformly. Loan against property interest rates depend on several key factors.

Credit score

One of the important factors that affect the loan against property interest rate is your CIBIL score. Though it is a secured loan with affordable rates of interest. The minimum CIBIL score required for a loan against property (LAP) can vary depending on the lender and other details about the loan.

Applicant’s profile

When deciding property loan interest rates, lenders consider your total financial profile. Salaried individuals may secure better loan against property interest rates than self-employed individuals as they enjoy a fixed income. However, self-employed professionals like doctors and CAs can get low interest rates. If salaried, your lender will prefer you have a reputed employer, whose ability to pay salaries is unquestionable.

Likewise, your income and debt-to-income ratio will be evaluated. A high income and low debt-to-income ratio can translate to an affordable interest rate. Your age, and the number of working years left, also impacts the loan against property interest rates you get.

Loan duration

Opting for a short tenure can help you secure a low interest rate as lenders can better estimate variations in your credit profile and their own loan against property interest rate over the short term. When the repayment window is long, they may have to budget for some change. However, you must bear in mind the impact of your EMI on your financial profile, and in particular, your debt-to-income ratio. If lenders perceive that a short tenure increases the risk of default, they may charge a high interest rate or ask you to opt for a long tenure.

Property to be mortgaged

The type of property you provide as the mortgage such as its location, condition, and age affect the loan interest rate. Residential properties are deemed to be more valuable and can fetch lower loan against property interest rates than commercial properties. Similarly, a property in a prime location, with ample civic amenities, and in pristine condition will have a higher resale value than a property in a rundown condition, located in a less desired locality. Better properties attract better loan against property interest rates.

Why choose a loan against property?

A loan against property is not just a financial product—it’s a powerful tool to unlock the potential of your property without losing ownership. Whether you need funds for business expansion, education, medical emergencies, or other significant financial goals, an loan against property provides a versatile solution. By leveraging your property, you gain access to substantial funds at competitive interest rates. With flexible repayment options and longer tenures, loan ensure minimal strain on your monthly finances while helping you achieve your goals. Enjoy lower EMIs starting from Rs. 750/lakh* and longer repayment tenures. Take the first step toward realizing your financial aspirations today.

Securing a mortgage loan at a low interest rate is a strategic process that requires careful planning. Firstly, maintain a high credit score by ensuring timely repayment of bills and loans. This demonstrates to lenders that you're a trustworthy borrower. As a consistent income source indicates financial stability, strive to maintain steady employment. The property offered as collateral is also considered; high-value properties in prime locations may fetch better rates. Don't shy away from negotiating with your lender, especially if you share a good banking history with them. Finally, remember to compare loan offers from different lenders. With a thorough comparison, you can select the most beneficial mortgage loan at a low-interest rate.

Reducing the burden of Loan Against Property (LAP) interest rates involves a combination of strategic financial management and proactive steps. Here's how you can work towards lightening the interest rate burden:

• Prepayment: Whenever you have surplus funds, consider making partial prepayments towards your LAP. This reduces the principal amount, resulting in lower interest payments over time.
• Loan Tenure Reduction: If your financial situation allows, opt for a shorter loan tenure. While this increases your monthly payments, it significantly reduces the overall interest payout.
• Regular Repayment: Ensure that you make your LAP payments on time. Late payments can attract penalties, increasing the interest burden. Automate payments to avoid missing deadlines.
• Interest Calculation: Some lenders offer the option of calculating interest on a reducing balance basis rather than a flat rate. Opt for this if available, as it can save you money.
• Negotiation with Lender: Contact your lender to negotiate better terms, including a reduction in the interest rate. Highlight your good payment history and inquire about any ongoing promotions.
• Savings and Investments: Use interest-bearing savings accounts or investments to set aside funds for LAP repayments. This can help you offset the interest burden over time.
• Budgeting and Cutting Expenses: Create a realistic budget to identify areas where you can cut unnecessary expenses. Allocate the savings towards LAP repayments.
• Financial Planning: Consult a financial advisor to create a comprehensive financial plan. They can provide insights into managing your LAP and other financial goals effectively.
• Leverage Windfalls: If you receive unexpected windfalls like bonuses, tax refunds, or inheritance, consider using a portion of these funds to make lump-sum payments towards your LAP.

Remember that while these strategies can help reduce the LAP interest burden, they should be aligned with your financial capabilities and long-term goals. It's advisable to consult with financial professionals before making significant financial decisions.

Here are several tips that can help you get a loan on a property with low interest rates:

• Credit score: A high credit score, reflecting proficient financial management and reliability, can reduce interest rates.
• Loan amount: The loan amount requested is also factored in, with larger amounts potentially attracting higher interest rates.
• Type of property: The type of property, including its location and value, can impact the loan's associated risk level, and consequently, the interest rate.
• Income and employment: Income stability and employment type and continuity often dictates your ability to service the loan. Therefore, these conditions are vital in determining the LAP interest rate in India.