property

How to calculate loan against property?

11:18 PM RAWAT 0 Comments

Property can be used for a variety of purposes like building homes, office, manufacturing site and retail shop and various other purposes. One such purpose is a loan against property. As the name suggests, loan against property is a credit which is given against the loan. It is a secured loan and individuals are required to pledge their property to get the loans. It helps an individual to use the property in the best possible way. People can also make use of loan against property calculator that can give further help.

Finance offered through loans against property can be used for a variety of purposes like giving shape to business, expanding the business, hiring the employees and personal uses. Loan against property can be availed against both commercial and residential property.

Advantages of Loan against property

1. It helps one to meet the financial requirement in unpredictable circumstances.

2. It helps one to provide the initial stimulus to the startup idea by providing the requisite finance. It also helps in the expansion of the business.

3. LAP is used for several other purposes like meeting the requirement of weeding, helps in financing travelling and assists in purchasing a vehicle.

4. Loan offered by different banks and financial institutions ranges from 70% to 90% of the property’s value. Thus helps to avail a reasonable amount.

5. Generally, the processing time of the LAP is quick and hassle-free.

6. Loan against property also takes into account the soaring prices of the property. Borrowers are eligible to apply for the top-up loans in case of hike in property prices.

How to calculate loan against property?

 LAP EMI Calculation manually

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Here,

EMI - Equated Monthly Instalment

P - Principal amount

R – Rate of interest

N - Loan tenure

How to calculate loan against property EMI online?

Loan against property involves payment of EMI or equated monthly payments. Some of the essential things for the calculation of EMIs are:

       Use online EMI calculator.

       The principal amount is the first and foremost thing required for calculation.

       An individual should then check the rates of interest offered.

       Tenure of payment must be decided.

       Once individuals have entered all the details, the resulting equated monthly payments will be displayed on the EMI calculator page.

Factors influencing loan against property EMIs are:

Principal amount: The amount for the loan against property availed from the bank depends on the property. The higher the value of property the higher the loan amount and its stans for EMIs as well, the bigger the loan amount, higher the EMIs.

Tenure:  There is an inverse relationship between EMIs and tenure. Longer then tenure the lower the EMIs and vice-versa.

Rate of interest: The most crucial factor that determines the ability and the ease to repay the loan is the loan interest rate. A higher interest rate can prevent from taking a more considerable loan amount or can create a situation for a longer tenure. On the contrary, a lower interest rate helps to avail a more considerable loan amount and increases the possibility of easy prepayment

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Loan against property as the name suggests is the credit availed against the property. It is a secured loan and requires to pledge the property Individuals can avail the loan against property against both residential and commercial property. It helps one to give wings to one’s business idea, expend current business, hire staff or fulfil personal obligations. Individuals can avail a loan of 80% to 90% of the value of the property.

Loan against property involves equated monthly payments, it can be calculated either online or manually.

LAP EMI Calculation manually

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Here,

EMI - Equated Monthly Instalment

P - Principal amount

R – Rate of interest

N - Loan tenure

Calculate loan against property EMI online?

       Use online EMI calculator.

       The principal amount is the first and foremost thing required for calculation.

       An individual should then check the rates of interest offered.

       Tenure of payment must be decided.

       Once individuals have entered all the details, the resulting equated monthly payments will be displayed on the EMI calculator page.

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