How is a personal loan different from a loan against property, shares or gold?
A loan against property is exactly what the name implies — a loan given or disbursed by mortgaging property. The loan is given as a certain percentage of the property’s market value. It belongs to the secured loan category where the borrower provides a guarantee by using his property as securit while personal loans might be unsecured, meaning that you can apply and get it without providing any collateral, like instant payday loans for bad credit. On account of the house being the collateral, the rate of interest charged by banks tends to be much lower than personal loans.
LAP – Loans against Property, loans against shares or gold are a more sensible option in comparison to an unsecured personal loan if one needs to pay back the bank over a longer time frame. The loan amount one is eligible for is dependent on the value of the property and the interest rates are much lower. It gives the loan taker ample time to repay the loan but the catch is failure to do so will result in the property being auctioned to secure repayment by the bank/financial institution. On the other hand, the advantage of a personal loan is that it requires minimum documentation and is quicker to process.
LAP – Loans Against Property, loans against shares or gold are a more sensible option in comparison to an unsecured personal loan if one needs to pay back the bank over a longer time frame. The loan amount one is eligible for is dependent on the value of the property and the interest rates are much lower. It gives the loan taker sufficient time to repay the loan but the catch is failure to do so will result in the property being auctioned to secure repayment by the bank/financial institution. On the other hand, the advantage of a personal loan is that it requires minimum documentation and is quicker to process.
