Factors That May Affect On Your Mortgage Loan Interest Rate
With the substantial loan amount, prolonged tenor and faster approval within 48 hours, a loan against property is an ideal way to fund both personal and professional expenses. As the tenors of such loans are long, you get to enjoy an affordable EMI amount and a low-interest rate.
The interest rate is charged on the loan amount as a fee to avail a loan. Several factors that can affect the mortgage loan interest rate are given below.
- The Marginal Cost Of Fund Based Lending Rate (Mclr)- An MCLR is the lowest rate of interest below which lenders are restricted from lending. The MCLR depends on the repo rate published by the RBI. An increase or drop in this MCLR will change the interest rate of your loan accordingly.
- Type of Interest Rate- While you avail a mortgage loan, your lender provides you with two types of interest rates that you can choose from such as the fixed interest rate and floating interest.
- Fixed interest rate- This type of rate remains fixed throughout the tenor irrespective of the change in the MCLR.
- Floating interest rate- This rate changes following the difference in the MCLR. Thus, it is advisable to avail a loan at a floating interest rate to ensure a drop in the interest rate as and when the MCLR drops.
- Credit Score- An essential factor is your credit score that affects loan against property eligibility while you apply. Having a credit score of 750 and above will also fetch you a loan at a low-interest rate. Also, you should have a good credit history, which is as important as having a good credit score. Your credit history is a track on your past loans, repayment history and handling quality of loans.

- Loan Tenor- The loan against property interest rate will also depend on the tenor you opt for. Shorter tenor might reduce the interest rate on your credit but increases the EMI amount. Thus, to make your EMIs affordable, opt for a prolonged tenor. Consider your age, loan amount and other necessary factors while you determine the ideal tenor of your loan against property.
- Loan and EMI Amount- Having a higher loan amount might increase your mortgage loan interest rate. However, if you have a proper cash flow and the capability of paying higher EMIs, you can avail a loan with a higher amount. Also, a high EMI amount can help you avail a loan with a lower interest rate.
Several financial institutions and NBFCs offer higher loan amount at an attractive interest rate. Bajaj Finserv is one such NBFC that provides Loan Against Property against minimum documents at a competitive interest rate. They also offer balance transfer facilities, flexible tenor, online account access, loan up to Rs. 3.5 Crore and other lucrative benefits.
Bajaj Finserv also brings in pre-approved offers to make the application process fast and hassle-free. Pre-approved offers also assist you in availing a low mortgage loan interest rate. These pre-approved offers are available on a range of financial products and both secured credits such as home loans and unsecured credits like business loans and personal loans.
The application process of such loans is also easy and can be done online. To apply, visit your lender’s official website and fill out the application form by providing some necessary personal and financial information.
Once you submit the application form, a representative of your lender will visit you to collect some essential papers such as KYC documents, address proof, income proof, documents of the property to be mortgaged, etc. After your lender collects the required documents, you will receive the approval for your loan within 48 hours and the amount will be disbursed accordingly.
In addition to the above, several other factors that affect the interest rate of your loan against property such as your age, financial stability, occupation, type of mortgaged property, etc. Apart from the interest rate, there are other charges that are associated with your loan such as part-payment and foreclosure charges, penal charges, statement charges, processing fee, EMI bounce charge, property evaluation fee, etc. However, consider comparing multiple lenders by asking for quotations before you select your lender. Proper comparison will assist you in finding a lender with the lowest interest rates and other charges.
