loan against property

How to Get a Substantial Loan Against Property at a Low-Interest Rate

A loan against property, also known as a mortgage loan, is a type of secured loan. In the case of these loans, the borrower’s property serves as security. Borrowers can pledge both residential as well as commercial properties as security. However, most lenders offer their most lucrative deals to individuals pledging a residential property as lenders opine that there is least risk involved for the lender in this scenario. 

One may think that since mortgage loans are secured loans, backed by collateral, lenders must extend their most lucrative deals to anyone pledging a good property. This, unfortunately, is not true. All lenders judge an applicant’s application against a variety of factors. In this article, we discuss these factors in detail. Gaining an understanding of these factors will allow you to avail of a loan against a property at the lowest interest rate possible.  

How to Get a Substantial Loan Against Property at a Low-Interest Rate

If you are planning to avail of a loan against property, keeping a few things in mind can help. Read on to know more. 

Property in Question

A loan against property is backed by security, i.e. the property pledged as collateral. It is, therefore, not very surprising that the property pledged as security plays a key role in determining the final rate of interest. 

Residential properties attract better deals and lower loan against property interest rate from borrowers simply because individuals pledging their homes as collateral rarely default on payments. Similarly, properties located in central locations and having the most modern amenities also attract the best deals from lenders. 

If you own more than a single property, use the property that will fetch you the best interest rate. 

Credit Score

It does not matter if you are pledging your property as security, your lender will check your credit score before approving your application. 

A borrower’s credit score depends on several factors, such as a borrower’s borrowing and repayment behaviour, their ability to use the credit available to them judiciously, whether or not they have ever defaulted on payments, etc. It also gives away crucial information about borrowers and gives lenders an idea as to whether or not a borrower can be trusted with timely repayments.

If you want the lowest loan against property interest rates, make sure your credit score is at least 750. Anything below this number will deem you as an unreliable borrower, and lenders will, therefore, extend you a loan against property at a high-interest rate. 

Income Profile and Job Stability

Any lender will extend to you their best loan against a property interest rate only when they feel convinced that you will repay the loan on time. To judge your repayment capacity, other than your CIBIL score, your chosen lender will also look at your income profile and job stability. 

Individuals employed with a government firm or a highly reputed multi-national company are more likely to get better interest rates than individuals employed with a recently-founded company. Similarly, individuals who have been with the same company for at least three to five years will most certainly get better interest rates from a lender than an individual who has been with their employer for only a few months. 

If you are someone who switches jobs often, we recommend staying with your employer for at least a year or two if you want the best interest rates on a loan from your chosen lender. 


Age is another important factor that affects the loan against property interest rates. Lenders extend their best loan terms to borrowers in their late 20s and early 30s as these individuals have many working years ahead of them. Further, these individuals are more likely to get more promotions and with each promotion, their ability to repay the loan will increase as well. 

Individuals nearing their retirement do not have many working years ahead of them. Thus, it is natural that their ability to repay a loan will diminish considerably once they have retired. Lenders, therefore, hesitate a lot while extending loan offers to individuals in their late 50s. Even when they extend a loan, it is usually at a high-interest rate. However, this does not mean that senior citizens and older borrowers cannot get a decent interest rate. Such individuals must add a co-applicant, someone young with a good CIBIL score and a stable income source. Doing this will help to get a low-interest rate. 


Your tenor will also affect your loan against property interest rates. When borrowers opt for a longer tenor, they do not only make their EMIs and the loan more affordable, but they also agree to increase the total interest paid to the lender. After all, the longer the tenor, the higher is the total interest paid. Therefore, many lenders sanction loans at a lower rate of interest when a borrower opts for a longer tenor. However, this is not true of all lenders. So, talk to your chosen lender to get more details on this. 


When it comes to a loan, even a decimal point decrease in the rate of interest can lead to huge savings in the long run. Therefore, if you are taking a loan against a property, your must try your best to get the lowest interest rate possible. Keeping the above pointers in mind will certainly help in this regard. 

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