Home Finance Will Loan against Property Help You to Get Smaller EMIs as Compared...

Will Loan against Property Help You to Get Smaller EMIs as Compared to Other Loans?

So you’ve finally decided to go to the loan route to meet your expenses. Now the research part comes in. Of course, you’d want the loan with the lowest EMI and interest rate. Some others may want to have a longer tenure or a larger value loan.

There were indeed little options once upon a time. Nowadays though, you have various loan and mortgage options to choose from. A mortgage loan’s interest rate depends upon various factors like credit score and bank’s risk. Providing personal loans to self-employed individuals is a risky proposition and hence costs higher interest and EMIs.

Subsequently, the repayment time of personal loans is small and the EMI high. That’s because the bank is taking a higher risk of providing you money in advance. They don’t have your assets to sell if you fail to repay the loan on time. 

That is not the case when you apply for a mortgage loan, you mortgage your property and the bank can confiscate it in case you fail to repay the loan. That comes with a length of terms and conditions but the loan is quite lucrative. You can loan nearly 70% of your property’s cost at maximum and can take up to 20 years to repay it when you apply for a mortgage loan. Likewise, you’d pay smaller EMIs that are convenient to repay.

Reasons, why Loan Against Property helps, get lower EMIs

Lower Risk

If you have a residential or commercial property for a mortgage, it’s best to use that to get your loan. Indeed, the bank or finance companies aren’t at any risk and hence can offer you larger values of loan for longer periods. Personal Loans, on the other hand, won’t get you high-value loans either. You’d have to repay them quickly and hence would need to pay higher EMI.

High Tenure Loan

You can take a loan against property and pay them back in as long as 20 years. Naturally, the EMI would be lower when the amount is spread over a large time. Personal loans, on the other hand, have to be paid back quickly and at a higher mortgage loan interest rate because the bank has only you as a guarantor. 

The value of the property is greater than the income

You might be a salaried employee with good earnings but the salary is never a complete guarantee since jobs can be temporary. There’s no permanent guarantee that your job will remain until you pay the loan. On the other hand, the value of property keeps on increasing, and hence the bank’s money is safe.

They can get their money back by selling off the property in case you fail to repay the loan for a long time. Hence, they provide a lower interest rate and longer tenure of EMI for loans against property.

Rofikul Islamhttps://spreadmyfiles.com/
I’m Rofikul Islam: I am a content manager, and the author of spreadmyfiles.com and a full time blogger. Favorite things include my camera, travelling, business,caring my bueaty,fitness,food and my fashion.My whats app number +919749236338
RELATED ARTICLES

Wire Transfers or Demand Drafts: Which is a Better Way to Transfer Money From India to the UK?

Are you traveling to the UK? Then you'll need to exchange money via different modes of money transfer. But, if you're not...

Here’s How SME Loans Can Fulfil Your Business Needs

The need for funding arises during various phases for small businesses. These phases may include setting up the company, managing its operations, equipment up-gradation,...

Is Post Office Fixed Deposit Good For Your Future?

Government-backed post office FD plans are safe and popular as they offer guaranteed returns but modest returns only. The post-tax returns with post office...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

How to Use C to Assist With File Conversion?

Are you looking for a way to convert your files? Converting your files into different formats is no longer...

Features to Consider for Successful Workforce Planning

We often hear Workforce Planning but anyone rarely explains it. So what is workforce planning? Why is it important for an organization?...

Best Methods to Buy Tiktok Likes for Better Brand Promotion and Marketing

Tiktok is a smart social media site which is the bridge for people to post their videos for monetizing and business promotion....

Everything You Need to Know About the New Redmi Note 9 Pro Max

Redmi note 9 pro max was released on March 12, 2020, and within a week, it had a dedicated following. The phone...

Recent Comments