In recent times, mortgage or property loans have emerged as ideal credit options for low-cost borrowing in India. With the availability of reduced interest rates on such loans since the past year, more borrowers have begun to opt for these credits.
While interest rates are certainly crucial in determining the repayment liability of a borrower, they are not the sole driving factor in this regard. Ease of repayment also depends on how a borrower approaches the same. For example, most borrowers resort to a mortgage loan calculator first to understand their liabilities. Tools like these are facilitated from the lender’s end to help borrowers ease out their repayment concerns.
What is a mortgage loan?
Any funds sanctioned in exchange for collateral are termed as mortgage loan. If you are pledging a property or plot against the fund, the loan would be called a property loan. However, it is commonly referred to as a loan against property or LAP.
One of the best features of such loans is that they come with zero end-use restrictions, which means you can utilise the funds for any cause whatsoever. For instance, you can use a loan against property for education, travel, medical, personal, professional, or business expenses. Property loan interest rates are also lower compared to other loan options because of the secured nature of these funds.
The borrowable principal of a LAP loan depends on the market value of the property you are mortgaging. Few lenders offer LTV (loan-to-value) up to 75% to 90% of the property’s present market value to the borrowers.
Nonetheless, availing substantial funds also leads to an increase in the repayment liability. One can, however, ease out such worries using the online assistance that lenders provide. A loan EMI calculator can be mentioned in this context.
What are the benefits of a mortgage loan?
- A significant loan amount
You can access an amount as high as up to Rs.1 crore as per your eligibility. You can use the amount as per your needs without restrictions.
- Quick loan disbursal
Once approved, the loan amount can be credited into your bank account within 96 hours.
- Flexible tenor
You can stretch your loan amount over a tenor ranging from 2 to 20 years. This way, you can manage an easy repayment of the mortgage loan.
How can you ease loan repayment using a mortgage loan calculator?
A loan against property EMI calculator helps prospective borrowers check their monthly instalment liabilities against LAP. It can be used before or after availing a loan against property. The calculator utilises the following formula to compute EMIs:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Here P denotes the loan amount, R denotes the interest rate, and N denotes the number of EMIs or number of months in the tenor.
Using a mortgage loan calculator is simple. The below steps are all that a user needs to follow to compute his/her loan EMIs.
- Visit the portal of the lending company you prefer
- Look for a loan against property calculator
- Begin entering the values; you can either use the slider or type them in
- Enter the amount you want to borrow as a mortgage loan
- Select the ideal repayment tenor for your loan
- Finally, enter the rate of interest that the lender is charging
The instalment amount you will need to service will then appear on screen. You can also view the EMI amount, interest outgo, and net repayment in the results. The interest outgo of a loan depends primarily on the mortgage loan interest rate levied by the lender. You can adjust the tenor and loan principal to reduce your expenses.
Additional Read : Can You Apply for a Personal Loan After Bankruptcy?
What are the eligibility norms and documents needed for a LAP loan?
- You need to be aged between 33 and 58 years.
- You should be a resident Indian citizen.
- You need to be employed with an MNC, Public and Private Limited Company.
- Latest salary slips.
- Last 3 months’ bank account statements.
- Aadhaar card/PAN card.
- Address proof.
- IT Returns (ITRs).
- Copy of the property you wish to mortgage to the lender.
Borrowers can also prepay a loan against property to save money on interest outgo. It also helps you close the loan account sooner instead of bearing the EMIs for a longer span. You can use a foreclosure calculator to check how you benefit from this facility.
Apart from these facilities, financial institutions also extend pre-approved offers that ensure faster and easier access to credit. You can avail these customised benefits on a range of financial products, such as loan against property and home loan. Check your pre-approved offers instantly by providing your name and contact number.
You have a mortgage loan calculator accessible at all times to help you understand these liabilities better. Plus, using an online calculator instead of computing values manually ensures error-free results.