Introduction
What is a loan against property? This is a frequently asked
question by individuals seeking a higher loan amount at a lower rate. A loan
against property is a secured loan where one's residential or commercial
property is pledged as a collateral to a bank or a financial institution. Banks
lend a certain percentage of the property’s market value as a loan. There’s
often confusion amongst clients between a loan against property eligibility
calculator and an EMI calculator. This article will throw more light on these
concepts and help you understand the specifics of a loan against property.
Understanding
Loan Against Property
A loan against property, as the name suggests, is
taken against a property that you own. The property, in this scenario, acts as
a security for the loan. The loan amount that a person is eligible to receive
is dependent upon the market value of the property. Depending on the lender and
the type of property, the loan amount can stretch up to 50% to 70% of the
property's market value.
Features of
Loan Against Property
One of the most distinguishing features of a loan against
property is that it offers a lower interest rate compared to personal loans.
Since it’s secured against a property, lenders bear lesser risk and hence the
lower interest rates. This loan can be availed for a longer tenure, usually
between 5 to 15 years.
The Role of a
Loan Against Property Eligibility Calculator
So, what's a loan against property eligibility calculator?
This is a free online tool that helps you to estimate the loan amount you are
eligible to borrow from a bank or financial institution using your property as
security.
The loan against property
eligibility calculator requires you to input details such as the type of property,
its current market value, your age, income, existing liabilities, if any, and
then uses its proprietary algorithm to give you an estimated loan value that
you are eligible for. This lets you know beforehand how much loan amount you
can anticipate borrowing, enabling you to plan your finances effectively.
Deciphering an
EMI Calculator
An EMI (Equated Monthly Instalment) calculator is a handy
online tool that helps you compute the monthly instalment or EMI (comprising of
principal and interest) you will have to repay on your loan against property.
An EMI calculator requires inputs like loan amount, tenure and the rate of
interest.
Effectively, an EMI calculator not only aids in knowing your
monthly outgo but also helps you plan your budget and assess your repayment
capacity. Thus making it easy for you to manage your monthly finances and repay
your loan comfortably.
The Difference
Between Both Calculators
The basic difference between a loan against property
eligibility calculator and an EMI calculator lies in their end objectives.
While the former gives an estimate of how much loan amount you are eligible
for, the latter provides an estimate of your monthly outgo post availing the
loan. Both these tools are useful in different stages of the loan process. The
loan against property eligibility calculator comes in handy at the beginning of
the process when you are planning to apply for the loan. On the other hand, an
EMI calculator is useful once your loan is approved, and you need to arrange
your finances accordingly to make the monthly payments.
Conclusion
Understanding what is loan against property, the utility of a
loan against property eligibility calculator and an EMI calculator can make the
process of availing a loan simpler and more strategic. Making an informed
decision can significantly impact your financial health and help manage the
repayment more effectively. Therefore, using these efficient tools can help
borrowers navigate the path to loans in a stress-free and organized manner.
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