Planning to take a personal loan? Do you know, you can take a Loan Against Property and get entitled with the same facilities and flexibility like that of personal loan, but along with additional lucrative advantages? Read the 3 key advantages of a loan against property over a personal loan to find out more.
- The Interest Rate: The interest rate difference is an influencing factor which convinces people to opt for a loan against property over a personal loan. The same arises due to the difference in nature of the two credit schemes: the personal loan is unsecured in nature, whereas the second alternative falls under the secured loan category. Therefore, the interest rate offered against the latter loan option will always be lesser in comparison to the former alternative.
- Repayment tenor: The repayment tenor will always be higher in case of credit availed against the value of a property due to the low-risk factor. The same is very high in case of personal loan due to the absence of the security. A personal loan is offered against the loan eligibility of the lender and involves no collateral, hence the lender keeps the repayment tenor on the lower side to retract the money as quickly as they can.
- Higher Amount: Again, due to the high-risk factor arising due to lack of security, the lender is highly prone to face monetary loss if the borrower fails to repay and turns into a non-performing asset. The same risk is very low in a loan taken against a property due to the involvement of a security, which puts the lender in a safe position and they will proactively offer a higher borrowing limit to their customers.
On a concluding note, the choice depends on the financial ability and the expectations of the borrower. He/she may choose personal loan if they lack a property of the required value. But in case they have a property that can be used to obtain the loan, a loan against property is a lucrative choice for them.
Also Read it here: Loan Against Property vs. Personal Loan: Which is Better?
Alisha Antil is your best financial helper for insurance. She has a vast experience in finance and insurance and provide to you the expert advise in insuring your property and health.
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