Loans against property, also known as property loans or mortgage loans, are loans that individuals avail of by pledging a property they have in their name as security for the loan. These loans are sanctioned against a residential or commercial property or a piece of land.
Once a borrower pledges the property as collateral, the lender places an encumbrance on it. This encumbrance makes it impossible for the loan borrower to sell the property while still repaying the loan.
However, the borrower can use the property as they desire. In case they default on loan repayment for an extended period or declare that they will be unable to fulfil their loan against property EMI obligation, the lender can sell the pledged property and recover losses.
Loans against property are an excellent way to arrange funds, especially when your need for funds is urgent and you need a substantial amount. However, since these loans require borrowers to pledge collateral, they must avail of the loan only after carefully assessing their financial readiness and repayment capacity. A loan against property EMI calculator can prove greatly helpful here.
What is a Loan Against Property EMI Calculator?
A loan against property EMI calculator is an online tool that helps loan applicants calculate the loan EMIs they will have to pay to repay their desired loan amount over the loan tenor that they think will work best for them. Loan against property EMI calculators are free to use. There are also many different loans against property EMI calculators to choose from on the internet. Here’s how you can use this tool to plan your repayment journey.
Before you start using the loan against the property EMI calculator, do budgeting. Make a list of all your necessary and unnecessary expenses. See what unnecessary expenses you can cut down on to increase your borrowing as well as repayment capacity. Finally, arrive at an amount that you can comfortably afford to pay in mortgage loan EMIs each month. Having this figure in your mind will make repayment planning a whole lot easier.
Now, access the loan against property EMI calculator. The first thing you will be required to do is enter the loan amount that you wish to borrow. Next, enter your desired loan tenor. Loan against property EMI calculators have horizontal bars that you can move to feed your desired loan amount and tenor into the system. Finally, enter the property loan interest rate you have been offered. Borrowers must also try to secure mortgage loan lowest interest rates and this becomes possible only when they reach out to as many lenders as they can and negotiate hard with each of them.
Once you feed these three values into the loan against property EMI calculator, the calculator will show you the EMIs you will need to pay each month to repay the loan within the desired period. If you find the EMIs too high, you have two options: you can either increase your loan tenor or reduce the loan amount. Increasing the loan tenor will automatically also increase the interest payout. The loan against property EMI calculator will also tell you the total interest you will need to pay on your loan and thus, the total cost of borrowing the loan. If you believe that you can afford to pay a higher amount in EMIs, you can either increase the loan amount or decrease the loan tenor and become debt-free quickly.
The loan against property EMI calculators also help with repayment planning in another way. It gives borrowers the amortization schedule, which is essentially a breakdown of how each EMI will be divided to cover the principal and interest components of the mortgage loan and how much will left to be paid at the end of each month.
Mortgage loan borrowers try to become debt-free as quickly as possible so that they can regain complete ownership of the pledged property. Becoming debt-free can be achieved in two ways. Borrowers can either make prepayments whenever possible or simply pay the entire amount and foreclose the loan.
Both prepayments and foreclosure must be opted for at the right time. The amortization schedule provided by the loan against property EMI calculator helps borrowers figure out the most ideal time for both prepayments and foreclosure.
Final Words
In conclusion, a loan against property EMI calculator is a highly beneficial tool that every individual planning to apply for a mortgage loan must use.
