Tough financial situations can arise anytime and when these situations do come, people find themselves needing financial help urgently. Borrowing from family or friends is not always comfortable. If you do not want to ask for help, you can pledge your immovable commercial or residential property to secure a mortgage loan and resolve all your financial worries. Mortgage loan interest rates are comparatively lower than personal loan and credit card loan interest rates. Further, these loans come with zero end-use restrictions and therefore, these loans are quite popular.
Definition of Mortgage Loan
A mortgage loan is a loan against a property owned by you. This property could be your home, a shop, or a non-agricultural piece of land. Your property is used as collateral for the loan and remains in possession of the lender until the loan has been paid off in full. If the borrower defaults in paying off the loan, the lender has the right to seize the property and auction it off. A mortgage loan calculator tool can help the borrower know beforehand the EMIs to be paid as well as help them compare interest rates offered by various lenders. This, in turn, helps the borrower to avail of the best mortgage loan interest rates.
Mortgage Loan Calculator and Its Uses
The mortgage loan calculator tool can help a borrower calculate and understand the EMIs to be paid on a specific sum of money borrowed at a given rate of interest and tenor. Here are some advantages of using the mortgage loan calculator tool and some reasons why you must use this tool.
It Helps You Compare Schemes
A mortgage loan calculator helps users to compare various loan schemes offered by different banks and understand how much they can save on EMIs by choosing a particular bank.
The mortgage loan calculator allows users to try out different combinations by entering different loan amounts, tenors, and rates of interest and ascertain the total cost of a mortgage for different combinations.
Get Amortization Schedule
It helps the users get detailed results on their monthly mortgage EMI payments, interest, and principal outstanding and plan a schedule in advance so that they do not miss on EMIs.
You Also Get Customized Results
Each user can enter their desired required interest rate, amortization period, and loan amount into the mortgage loan calculator and get customized results in an instant. The tool will not save any information; it can be trusted completely.
It Is an Easy and Handy Tool
A mortgage loan calculator is user-friendly and does quick calculations in less time to provide an overview of various mortgage options available in the market. It is, therefore, quick, accurate, and a handy tool.
It Simplifies Complex Calculations
Prospective loan applicants are often confused by the data and figures mentioned in the mortgage loan policy document or website. A mortgage loan calculator helps to simplify data and helps users get a clear picture of the variables and how they will affect their monthly EMI.
The use of this tool creates a win-win situation for both the borrowers and the banks/financial institutions. Mortgage loan calculators not only help lenders attract more visitors to the bank’s site but also improve customer satisfaction and retention. The users can also use this tool to enhance their knowledge of various financial products and efficiently use them.
Benefits of Long-Term Mortgage Loans
If you are planning to take a mortgage loan, we recommend opting for a long-term mortgage. Here’s some reasons why.
Larger Loan Value
Long term mortgage loans allow borrowers to avail of larger amounts of loan. The mortgage loan calculator can help you calculate the right amount to be borrowed so that EMIs are within your reach.
You Will Continue to Be the Legal Owner of the Property
This is true for both long-term and short-term loans. As a borrower, you can continue to remain the legal owner of the property while you use the funds from the mortgage loan to fulfill your needs. But defaulting EMIs may lead to confiscation of the property by the lender. Thus, one must be very careful while applying for a loan against property.
Easy Eligibility and Approval
Since mortgage loans are secure and do not require high eligibility, they are easily approved by banks and financial institutions. Further, long-term mortgage loans mean lower EMIs and therefore, higher personal repayment capacity of borrower. Thus, lenders approve long-term mortgage loans quickly and easily.
Lower Interest Rates
The mortgage loan interest rates are much lower than that of personal loans as these are secured loans. Also, long-term mortgage loans often come at a lower interest rate since long-term loans means higher interest payment towards the lender in the long run.
Flexible Repayment Tenor
In mortgage loans, you get the option of flexible repayment tenors. A long-term mortgage loan allows you to take care of your immediate financial emergency and repay the loan amount over time.
You are eligible for tax deductions up to INR 2 lakh on principal and interest payments if you are using the loan amount to fund a new residential house. Tax Exemption under Section 37(1) is applicable when the loan is used for business purposes, on the interest charges, processing fees, as well as documentation fees that are counted as business expenditure. There is no tax exemption facility in case the loan amount is used for education, marriage, travel, or medical bills.
In conclusion, a mortgage loan is a good option if you are looking for a long-term low-interest secured loan. However, it is advisable to use the mortgage loan calculator to compare mortgage loan interest rates before availing of this type of loan during your cash crisis to get the best deal for yourself.