Property loans are also known as loans against property. These are loans that borrowers avail of by pledging a residential or commercial property or even land as collateral. Mortgage loans offer many benefits. To start with, they attract a low rate of interest and go on for a long repayment tenor which makes loan EMIs affordable and eases loan repayment.
The loan funds come with zero end-use restrictions and thus, the loan borrower can use the money however they please. Most importantly, these loans include a substantial loan amount, large enough to take care of several different expenses. However, the key thing here is that property loans or loans against property are loans backed by security or collateral.
The collateral is a residential or commercial property that the loan borrower owns and if the loan borrower is unable to repay the loan on time, the lender can sell the pledged collateral to recover the money lost. This makes it crucial for loan borrowers to ensure that they are capable of repaying the loan amount that they are borrowing. They must also always set aside an emergency fund that will help them navigate financially tough times, if they ever arise.
If you are planning to avail yourself of a mortgage loan or a property loan, you must use the property loan calculator. This online tool can make your life a lot simpler and also protect you from mistakes related to your loan against property that may make loan repayment difficult at a later stage.
What is a Property Loan Calculator?
A property loan calculator or a mortgage loan calculator is an online tool that loan borrowers can use to calculate their loan against property EMIs even before they have begun the loan against property application process. The loan against property calculator works by asking the user for three inputs:
1. Loan Amount
Under loans against property, loan borrowers can borrow up to 705% of the pledged collateral’s value as a loan. However, this 75% can turn out to be a hefty amount that is difficult to repay. Therefore, under LAP, borrowers must always borrow what they need and are capable of repaying than what they are eligible for. So, choose your loan amount carefully.
2. Loan Tenor
When it comes to deciding one’s loan tenor, one must keep in mind that choosing a long loan tenor will make loan repayment easy through affordable EMIs but will also increase the cost of borrowing funds by increasing the total interest payout on the loan. One must try and create a balance between affordable EMIs and low interest payout on the loan.
3. Loan Against Property Interest Rate
The mortgage loan interest rate is decided by one’s lender. Securing the lowest mortgage loan interest rate is essential. So, all mortgage loan applicants must talk to as many lenders as they can and also negotiate with each of them for the lowest interest rate they can get.
Enter these three values into the mortgage loan calculator and the calculator will tell you your property loan EMIs, the total interest you will pay on your loan, and the total cost of borrowing money.
Borrowers who find the figures they see on screen satisfactory or desirable must go ahead and apply for the loan. However, people who find the EMIs too high or too low when seen in relation to their income and repayment capacity must change the values on the calculator to arrive at a loan amount and EMI that fits well within their budget.
Final Words
Property loan calculators are a highly beneficial tool. This tool is free to use. It helps you save time and effort and it can be trusted for accuracy every single time. Borrowers can use these calculators to figure out the most ideal combination of loan value and tenor for them and repay their loan comfortably.
Borrowers can also use the mortgage loan calculator to figure out the most ideal time for loan prepayments and foreclosure. The calculator can also prove to be helpful with monthly budgeting and repayment planning. In conclusion, this online tool can make your life much easier and protect you from wrong decisions. So, use it.
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