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Everything You Should Know About Loan Against Property Interest Rate – Read Here!

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Having good savings to fall back on is necessary that every individual should prioritise. Making sure most of the monthly income is saved, working hard for a raise, and even investing your money are all efforts that should be taken to improve financial stability. However, you never know what life has in store, and it is quite possible to suddenly face a situation in which you are required to take care of huge expenses. The reason could be anything right from funding your child’s education to paying for a family member’s medical bills. 

Now, you might not want to use a major chunk of savings to fund these bills. In such a situation, an effective solution to deal with the current expenses you are facing is to apply for a loan against property. Now, there are people who are sceptical about taking this loan, as they are worried about the loan’s interest rate. However, this should not come in the way of you finding financial assistance for the expenses at hand. To get a good deal on the loan, it is important to first learn about the loan against property interest rate in detail. So, let’s get started. 

Types of Interest Rates

Now, there are two types of interest rates that you can choose from while applying, namely a fixed interest rate and a floating interest rate. 

  1. Fixed interest rate 

With a loan that has a fixed interest rate, the rate of the loan does not go through any changes and remains constant during the entire tenure of the loan. While using a loan against property EMI calculator, it is much easier to calculate the loan’s monthly instalments if the loan has a fixed interest rate. You can plan your repayment knowing that the loan’s EMIs are not going to change. Do keep in mind that fixed interest rates are usually slightly higher as compared to floating interest rates.

  1. Floating interest rate

A floating interest rate implies that the loan against property’s rate would keep fluctuating as per changes in the market conditions. Since the loan’s interest rate keeps changing, the loan’s EMIs will also be changing. Lenders calculate the interest rate using a base rate that has been established by RBI. Therefore, when there are changes in the base rate, your loan’s interest rate would also go through changes. Do keep in mind that calculating the loan’s EMIs on a loan against property calculator could be difficult since the loan’s interest rate can keep fluctuating.Now, when it comes to picking out one of the two, this would depend on each borrower’s preference. If you are a borrower that is planning their repayment with the EMIs being constant and prefer no changes, going for a fixed interest rate can be suitable. However, if you think that the loan against property interest rate is going to go down and do not mind fluctuating EMIs, you can choose to opt for a floating interest rate.

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