Which is a better choice—a Personal Loan or a Loan against Property
by Anil Surma BankingA loan is your way out
during times when you’re low on cash. However, with the vast variety of loans
available out there, it’s not always easy to find and choose the best option.
If you’re looking to decide between a personal loan and a loan against
property, you need to know a few things about both these forms of credit before you make a decision.
Loan against Property vs.
Personal Loan
The difference between loan
against property and personal loans is quite fundamental. A personal loan is
unsecured, meaning that you don’t need to put own collateral to take one. A
loan against property, on the other hand, is secured with the property that you
pledge to the lender. In order to pick the right one, you need to find out what
your requirements are.
If you’re seeking a lower
loan amount that you can quickly pay back within a short duration of time, then
a personal loan may prove to be a better choice. Personal loans are quite easy
to obtain if you have a
relatively clean credit history. But
keep in mind that their interest rates are usually quite high, ranging from 14%
to 21%; that’s why you need to pay back your loan as quickly as possible. It’s
a good idea to mortgage your house only when you need a higher loan amount, for
a longer duration of time.
Many Banks offers both personal loans and loans
against property at
attractive interest rates. This banks also provides a part prepayment facility,
and lets you foreclose your loan with absolutely no additional charges.
Consider the Interest Rates
A loan against property is
known be one of the cheapest retail loans after home loans. A personal loan,
however, is definitely not as cheap. While loan against property interest rates
range from 12% to 16%, personal
loan interest rates usually
fluctuate between 13% and 21%. It’s important to choose an interest rate that’s
commensurate with your ability to repay.
Check the Loan Amount
The personal loan amount
that’s sanctioned to you depends mainly on your level of income, along with
your ability to repay. The loan against property amount, however, is dependent
on the value of the property you pledge. So it’s very likely that you’ll be
offered different amounts when you apply for both these kinds of loans. Choose
a loan amount that best suits your needs.
Whether it’s for a personal
loan or a loan against
property, it’s important to select a lender who you can trust.
Sponsor Ads
Created on Dec 31st 1969 18:00. Viewed 0 times.