Collateral Properties for Secured Loansby Alisha Sharma Go4Customer
Whether you want to buy a car or planning to start your own business you need to take a loan in order to make the full payment. Although there are dozens of different ways through which you can raise a fund for your business, the most common type of loans are unsecured and secured. Unsecured loans are those that aren’t backed by ant specific asset or money. The loan is extended by the lender on the basis of certain other factors such as creditworthiness and works on trust that the loan recipient will repay the amount on the committed time.
That’s the reason, unsecured loans are much riskier than the secured loans. Secured loans, on the other hand, is the type of loan in which some kind of asset is being seized so that the debtor repay’s the loan amount. After the GST roll-out, the system of getting loans has changed a bit and therefore, it has become important to have a proper understanding of loans before taking it up. In this post, we discuss the type of properties that can be collateral in order to get a secured loan. Take a look.
1. Savings Account
Everyone has a saving account and if you are willing to get a secured loan from a bank, you need to show or offer the bank something as a guarantee that you will repay the loan amount with interest at the committed time. Makes sure to discuss with the bank about the GST calculations in India done for getting loans and the interest amount that has to be paid on the loan amount. Therefore, giving a saving account with sufficient amount of money in it as a collateral to your bank in order to approve the loan is one way.
2. Precious Metals
Believe it or not, precious metals and even jewelry still work when it comes to getting secured loans. If you want to get approved your loan, you can use your precious metals as a collateral. Items like silver and gold bars can be used as collaterals as a guarantee that the debtor will repay the loan amount at the committed time and date. However, if you do not have any such metal to approve your loan, you can opt for further options.
In case, you are trying hard to get a business secured loan so that you can fund a purchase of inventory. The inventory can be used as a collateral, but, it is not a preferred method and most banks do not accept it as a guarantee of the repayment of the loan. Therefore, make sure form wherever you get loans, the bank is fully accepting the way of providing collaterals.
4. Real Estate
One of the best ways to get loans is via mortgaging your real-estate property to the bank in order to get the secured loan. The deal is kind of a promise that you make to the bank that you will return the loan amount with the additional interest rate at the committed or the mentioned time. If you think you are not ready to mortgage your property in order to get a loan on something, do not sign the documents until you are sure enough for the deal.
5. Outstanding Invoices
It is surprising that you can use your business invoices to get a loan. The invoices for which you haven’t been paid helps you to get a secured loan. Although they may restrict the cash flow and lead you to a default on a loan, these unpaid invoices can serve as a form of collateral in receiving the loan for the lender. The entire process is named as an invoice funding.
The Way Forward
After the GST roll-out, it has become important that you go through the GST calculations in India before getting any leans so that you have an idea of the interest amount that you might pay to end the loan amount. Another simple way is to mortgage your essential equipment whose worth is more. It is technically something that is basic such as computer, vehicle or anything related to it.
Created on Nov 6th 2017 00:41. Viewed 293 times.
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