Fixed vs Floating Rate on Loan Against Property

Fixed vs. Floating Interest Rate Loan Against Property – Which Should You Choose?

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Fixed vs. Floating Interest Rate Loan Against Property – Which Should You Choose

4 min 07 Aug 2025

Highlights:

Understanding the Basics – Fixed vs. Floating Interest Rate Loan Against Property
What Affects the Rate of Interest on a Loan Against Property?

When applying for a Loan Against Property, one of the key factors to consider is the interest rate. It sounds straightforward enough until you start comparing them. The interest rate can shape how much you pay over the tenure of your loan.

Let’s walk through the difference between fixed and floating interest rate Loans Against Property.

Understanding the Basics – Fixed vs. Floating Interest Rate Loan Against Property

A fixed interest rate is exactly what it sounds like—your interest rate remains constant for a fixed period, post which, it gets revised. Whether the market rate goes up or down, your EMI stays the same. This gives you predictability.

A floating interest rate, on the other hand, changes with market conditions. It’s linked to a benchmark rate set by the lender, which in turn is influenced by factors like the Repo Rate and broader economic shifts. This means your EMI may decrease over time when rates fall.

What Affects the Rate of Interest on a Loan Against Property?

Several factors influence the rate you’re offered, and understanding them can help you negotiate better terms. Key ones include:

Credit Score – A higher credit score may help you secure a lower interest rate
Market Conditions – Prevailing economic trends and policy rates directly impact lending rates
Nature of Employment – Your interest rate may vary based on whether you are a salaried applicant or a self-employed individual

The difference between fixed and floating interest rate loans against Property comes down to control versus flexibility. Fixed gives you predictability; floating offers potential savings.

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