DIFFERENT TYPE OF LOANS YOU CAN TAKE WITH SECURITIES
What are the different loans you would like to take?
Many people choose to go for personal loans, although they have a lot more choices of loans they can take.
Some options have lower interest rates than personal loans.
There are two types of loans you can take. You can take a secured loan or an unsecured loan.
With the secured loan, the lending institution can hold an asset as security if you fail to pay. The bank does not hold any of your property for an unsecured loan and only relies on your goodwill to deliver. You have to pay a higher interest for the unsecured loan because the bank does not have access to any of your assets.
The following article will show you the types of secured loans you can take.
- Loan against jewelry
You can take a loan from the bank and give your gold jewelry as security. Loan against gold jewelry takes a shorter time to process.
The gold loan works so that the higher your jewelry is worth, the lower the interest rate. For example, if you take a worth loan half of your gold, you will be given a low margin interest rate.
There isn’t a lot of paperwork involved in gold loans. The only requirement is your I’d and location.
- Loan on your insurance policy
Did you know you can take a loan against your insurance policy?
You can take a loan on your LIC policy if it’s eligible. Your LIC policy will only be a security for your loan if it has a surrender value after 3yrs yearly premium payments.
The loan you can get is 90% of your surrender value.
You can take a loan from an insurance company, which is ideal, or from a bank.
The advantage of this loan is you get a low-interest rate of 9-10%.
So with an insurance policy, it’s more beneficial to take a loan against it than a personal loan.
- Loans on fixed deposit
If you have a long-term fixed deposit, you can take a loan against it if you don’t want to withdraw.
The interest rate should be slightly higher than the interest rate earned by the fixed deposit account by 1-2%.
This loan is ideal if you don’t want to use your savings in the fixed deposit but still need money.
- Loan against assets
You can take a loan against your assets, such as a house or vehicle. Bank will give you a loan of up to 50% of the value of your property or monthly income. The interest rate is charged according to how big the loan is and how much margin you can give.
A loan on assets is suitable for anyone who needs a large loan to expand business or other big projects.
The property loans may have processing and prepayment charges.
- Loan on investments
You can take a loan against equities. There is a list of the funds and shares you can use for loan collateral. The amount of loan you can take against the funds is lower than the amount of the equities you have as they tend to be volatile.
Conclusion
With this information, you can choose which insurance works well for you.
The low-interest rate should be a factor to consider when choosing the kind of loan you can take. The fast processing rate is also an essential factor.
