WHAT ARE PROPERTY LOANS?

Posted by Shreekant Rao on April 8th, 2017

Property loan is given to the individuals who wish to purchase a flat, row house, bungalow from a private developer in a project which is approved by the government. One can apply individually or jointly for the property loan. All the proposed owners of the property for which you have availed the loan will be the co-borrowers of the loan.  Also not all co-borrowers will be the co-owners of the loan. Generally the family members are the co-applicants of the loan.

Property loan are given by various banking and non-banking financial institutions. They are given at a lower interest rate which ranges between 9-10 %. The processing fee is generally 1-2 % of the loan amount which is very nominal. Women candidates can get up to 0.50% of concession over the loan.  This 0.50 % of concession also makes a huge difference during the repayment of the loan. The banks and the non-banking financial institutions customize these loans as per the needs of the individuals. Hence there are loans available for salaried, self-employed, Nonresident Indians who are trying to buy a home in India. 

Two types of interest rates are offered when you avail for a property loan:

They are floating interest rate and fixed interest rate. When you avail for a property loan with floating interest rate it keeps on fluctuating throughout the tenure of the loan. In case of fixed interest rate the rate of interest remains the same throughout the tenure of the loan. There is no major change in the interest rate. It is always better to go for a floating interest rate as it is cheaper as compared to the fixed interest rate.

Usually while availing a loan the banks and the non-banking financial institutions do a background check of the person. They check the credit score or the CIBIL score of the applicant. It is based on the EMIs you have paid, if you have paid the EMIs on time you have a good credit score. A good credit score can help you avail property loan faster. Also you can negotiate with the bank if you have a good credit score and ask for lower interest rate.

The loan amount of the property loan you get qualified depends on the location of the property. If it is situated in a prime locality there are chances of getting higher loan eligibility. Prime locations are the ones which are located nearby the schools, banks, hospitals, colleges and business centers. Also while availing for a property loan go through the websites of various lenders and check the interest rates they are offering. Compare the Property Loan Interest Rate properly and go for a lender which provides flexibility in the interest rates and the repayment tenure. Always go for a loan which best suits your needs and understands you as well as your financial condition.

Property loans have thus simplified the dream of owning a property at an affordable rate by providing loans at cheaper and affordable rates to the applicants.