Talking about the present, there is only two credit scheme that offers end usage flexibility: the freedom to use the money in a way they want to. The first is a personal loan and the second is a loan against property. Now, given the high rate of interest a subscriber might have to pay due to the unsecured nature of the loan, a loan against property is likely to be the preferred choice of the majority. Having said that, which one to go for is a personal choice. A potential loan applicant should take the decision based on their needs.
Whichever option you go for, it is important that you acquire the know-how and understand the difference between the two loans. On that note, take a look at the benefits of taking a loan against property over other equivalent options.
> Interest Rates: Loan against property is secured in nature. Hence, it goes without saying that the Loan Against Property Interest Rates would be on the lower side compared to unsecured credit facilities. A secured scheme is available against the market value of the mortgaged collateral. On the other hand, the unsecured credit schemes are offered on the basis of the applicant’s credit score; which is one reason why secured loans are cheaper.
> Repayment Tenor: A secured loan facility such as the one being talked about, comes with a longer repayment tenor because the lender always has a way to recover the loan. However, in the case of an unsecured loan, the lender is always surrounded by uncertainty. Hence, they offer a small amount and keep the repayment tenor as short as possible.
Last but not the least, compare the different schemes before opting for a particular one.
Additional Read: A Complete Comparison of Home Loan and Loan Against Property
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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