Your Money: Not getting a personal loan? Check out other options

Gold loans assist debtors mitigate monetary want by monetising their idle gold.

By Gaurav Aggarwal

Personal mortgage is without doubt one of the most most well-liked mortgage options for meeting pressing monetary necessities, because it requires minimal paperwork, has fast disbursal, and comes with no restrictions on finish utilization of funds. However, the unsecured nature of personal loans makes lenders train warning whereas assessing mortgage purposes, typically resulting in the rejection of mortgage purposes.

Here are some various mortgage options which debtors might take into account if their personal mortgage application will get rejected:

Loan towards property (LAP)
Loan towards property is disbursed towards the collateral of business, industrial or residential plots. Given the secured nature of mortgage towards property, their curiosity rate is decrease than unsecured mortgage options. LAP curiosity rate is 7.95%-13.10 % p.a. and the mortgage quantity may be as excessive as 70% of the property’s market worth. Maximum mortgage tenure can go as much as 15 years, with a few lenders providing longer tenure of as much as 20 years. Hence, those that require a greater mortgage quantity and/or longer tenure for smaller EMIs can go for LAP. On the flip facet, the disbursal of mortgage towards property can take wherever between 2-3 weeks as a result of sophisticated approval course of.

Gold mortgage
Gold loans assist debtors mitigate monetary want by monetising their idle gold. Lenders often disburse gold loans on the identical day of receiving the mortgage application. However, the utmost mortgage tenure of gold loans is between one and three years. Some lenders provide longer mortgage tenure of as much as 5 years. Interest rate on gold loans is 7%-29%.

The mortgage quantity primarily is dependent upon the valuation of gold deposited as collateral and the Loan-To-Value (LTV) ratio sanctioned by the lender. Gold mortgage rates of interest are a lot decrease than unsecured loans due to the low credit score threat concerned.

Top-up house mortgage
Top up house loans can solely be availed by present house mortgage debtors with good compensation historical past. The eligible mortgage quantity is often the distinction between excellent house mortgage quantity and the unique mortgage quantity sanctioned by the lender. The tenure of top-up house mortgage can’t surpass the residual tenure of unique house mortgage, with lenders capping it at 15 years. The rates of interest of top-up house loans are often the identical or a little greater as in comparison with these charged for underlying house loans.

While the processing of top-up house mortgage purposes often takes between 1-2 weeks, a few lenders provide pre-approved top-up house loans to present house mortgage debtors with same-day mortgage disbursal.

Loan towards securities
Loan towards securities (LAS) is obtainable towards bonds, shares, ETFs, mutual funds, NSC, life insurance coverage insurance policies, KVPs, and so on. This facility permits traders to monetise their present funding with out compromising on essential monetary targets. The borrower will proceed to obtain the credit score of dividends, bonuses, curiosity, and so on., on the pledged collateral. The mortgage quantity is dependent upon the kind of safety provided as collateral and LTV ratio assigned by the lender for pledged securities.

LAS is often provided as an overdraft facility with a sanctioned credit score restrict. The borrower is free to attract all the sanctioned restrict or a a part of it as per his financial requirement. The curiosity element of mortgage towards securities is charged foundation the quantity drawn until its compensation, and may be 9.05%-18%.

The author is director, Unsecured Loans,

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