Financial crunch can come at any point in time in your life. This will call for a need to take a loan. However, many people don’t know what kind of loan they should go for. A personal loan and a loan against property are the two popular options that people usually go for.
A loan against property is a secured loan that you get by keeping your property as collateral with the financer. It is one of the cheapest loans that are available. These are easy to avail and give the borrower a space to negotiate better terms from the financer. Banks and housing finance companies like PNB Housing Finance Company provides loans against the property at lucrative interest rates.
A personal loan is an unsecured loan for which the borrower doesn’t have to pledge any security. Hence, this is a straightforward product where you can directly get a loan based on your credit history.
Loan against property, like PNB Housing loan against property, has a lot of advantages when compared to personal loans. In this article, we will discuss some of the reasons why a loan against property is always better than a personal loan.
Amount of the Loan
Being a secured loan, a loan against property increases the amount of loan that can be availed through this process. Up to 70% value of the property can be availed as the loan amount. For big financial requirements, this is the best option available out there.
Since a personal loan is not secured by any security, the banks are not ready to give big amounts as loans.
The loan against property interest rate is quite attractive due to the low risk attached to this loan. The risk of default is almost negligible and therefore, the loans against property interest rates are comparatively lower than that of personal loans.
The interest rates for personal loans are one of the highest among all types of loans due to the absence of any security backing up the loan.
Tenure of the Loan
This is where products like PNB Housing loan against property become undeniably attractive. Along with the high amount of loans available to the borrower, the tenure of this type of loan is also quite flexible and long. You can get loans for up to 15 to 18 years depending on various factors.
If you have your papers in order, then a loan against property can get processed in as less a period as 48 hours. Unlike a personal loan, where the entire check on credit history is required, no background check of credit history is done in this case. The door pick-up services for collecting documents provided by financers like PNB Housing Finance make the entire process hassle-free.
Hence, a loan against property has many inherent characteristics which make it a far better choice than a personal loan. The security associated with a loan against a property makes it easier for the borrower to negotiate better terms from the financer.
ample, when you finally decide to buy a good automobile for yourself, seldom do you think about negotiating prices with the dealerships leave alone getting a bargain on the loan terms. However, the truth is that even if you are made to believe that you are getting the best deal, there is always room for further negotiation.