Personal loans give out a higher rate of interest in comparison
Personal loans give out a higher rate of interest as compared to any other loan. Saving is a common phenomenon in this fast-moving world with increasing demands and competition. Now, this is leading to the necessity of additional funds which require loans from the bank or institution. There is no harm in doing so as it has become common nowadays and everyone is going for it.
Gaining information regarding loans is not a problem as one should be sure of what he/she is doing and is it helping them secure their earned money?
Everyone thinks that Personal loan is better but there some factors hidden regarding Loan Against Property (LAP). A secured loan means LAP because the money which is borrowed from some financial institution against property in a massive asset and is owned. EMI can be paid off at a lesser amount and such loans can be taken for business, education, marriage, etc.
A personal loan is taken for a person’s personal needs. These loans are taken from the bank or from the Non-Banking Finance Company(NBFC) to avoid heavy losses in the future. The time duration for personal loans is less than the loan against property.
Higher tenure in LAP versus personal loan LAP has low EMI which even helps in saving the income of the applicant.
Amount of Loan Sanctioned: LAP has a physical asset in the form of security from the customer, so they (loan givers) willingly give a good amount of loan then and there. In the personal loan, the maximum limit is up to 15-20lacs and it depends upon the income of the customer as well.
Interest Rates Offered: The rate of interest is the main property in LOANS. Taking a personal loan is risky and LAP gives a lower interest rate but is secured.
Faster disbursement in Personal Loans: The personal loan gives disburse faster than LAP. The maturity of personal loan ends soon but LAP takes on an average of 7 days(a week) to do so.
Prepayment Flexibility: There are certain terms and conditions on LAP and people tend to give payments in whichever way they want, as it has flexibility in it. This rule is not always available in the Personal Loan category.
Top Up Loan Facility: If the customer has not used up its loan to the maximum limit then he/she can avail a Top Up on the current loan. They have the right to avail it on the existing as authorized.
So both the loans have their own importance. The merits and demerits are there in both Personal loan and LAP. Now it is up to the claimant that what he chooses and how he chooses, but should always keep in mind the interest rate, processing time and amount prescribed and the level of convenience.