A loan for personal or secured loans. Which do you need to consider?

Description:The features and differences between a secured loan and a personal loan establish their worthiness.

When an unexpected medical expense or expense comes up and we need money from banks or other financial institutions are there to help us. There is no way to know what unexpected expenses and problems life might have to offer you. We might not be ready to deal with financial pressures in all circumstances. However, loans come in a variety of forms. If you own an investment that you want to be mortgaged or not there are loans that are suitable for you. An examination of loans against securities as well as private loanis mostly centered on the fact that you own an asset that you are able to mortgage or not.

Lending Against Securities (LAS)

The LAS is a secured loan. You can get the loan against security through the mortgaging of bonds, shares, shares fixed maturity plans, insurance policies, mutual funds and units, etc. as collateral for the amount of loan. The amount you can borrow will be based on what you have paid for the securities you agreed to pledge with your bank. We will review some of the key characteristics of a loan against securities.

• Because it’s secured, and requires checks to be completed to be made, the process of obtaining a loan takes a little longer.
• If you are a borrower, your credit score isn’t that important to be qualified to get this loan.
• The documentation is more thorough since the eligibility of a loan is determined by the value of the collateral.
• You can get a loan values ranging from 50% to 90 percent of the assets you taken as collateral.
• Interest rates for this credit are very low because it’s secured and a low-risk credit to the lender.
• A penalty for prepayment is not necessary.
• It’s an option to overdraw. Repayment, withdrawal and tenure time is very flexible.
• In addition, you have access to the option of online bank accounts as well as ATM facilities for the system of overdraft.
• It is able to meet requirements, such as:
• Medical emergencies
• Education
• Vacation or travel

For business or for any other purpose

Personal Loan

Personal loans are loans with no collateral. They do not require you to have collateral to obtain these loans. Personal loans are granted according to your work record, income level as well as your professional experience and credit history as well as the ability to repay. In the event that you’ve earned a great credit score, you will be capable of getting an individual loan with an interest rate lower than those provided by various financial institutions. Let’s look at some of the most important aspects of a personal loans.

• The documentation is minimal, requiring identification proof, proof of address and proof of income included as essential documents.
• The disbursal of the loan happens very swift. If you decide to apply for a pre-approved loan the time for disbursal of the loan will be quicker.
• The amount of the loan is flexible, with lenders providing an array of options ranging of rates ranging from the amount of Rs. 20000 to the amount of Rs. 40 lakhs.
• The loan’s term can be extended between 12 and 60 months.
• A personal loanpersonal loan is a way to consolidate the current debts, by paying off all high-interest obligations.
• These loans with no collateral may incur additional charges, such as processing fees, insurance charges service fees, etc.
• Also known as foreclosure charges A pre-payment penalty can be an option for personal loans.
• It could be used to finance a variety of personal goals like buying consumer goods or weddings or other major event, or consolidating existing debt, traveling medical expenses and home improvement.

The key factors to consider when deciding between Loan Against Securities and Personal Loan

• If you are borrowing for securities, the borrower are not able to sell your securities because they are secured by the lender. However personal loans have no requirements. If the amount of loan needed is large and you need to pay a high interest, then Loan Against Securities is the best alternative.
• A loan secured by securities is more affordable in comparison to the interest rates for personal loans.
• In case of emergency If you own security, it’s best to get an investment loan instead of liquidating them.

The advantages and distinctions between a secured loan or a personal loan determine their viability. If you own an investment that you could make a pledge to, LAS offers a cheaper alternative to finance. If, however, you are planning to trade your investments frequently and require a loan for each trade, personal loans provide freedom. If it’s an individual loan you’re contemplating, IDFC FIRST Bank provides attractive personal loan interest rates that come with extremely flexible repayment conditions.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The content is generic in nature and are intended for solely informational purposes. It’s not a substitute for advice specific to your specific situation. Information is subject to change and revision, as well as completion as well as verification and modification, and could change substantially. This information does not intend to be distributed or use by anyone in any country where such distribution or use is against the laws or regulations or be subject to IDFC FIRST Bank and its affiliated companies to registration or licensing conditions. IDFC FIRST Bank cannot be held accountable for any direct or indirect risk or obligation that the user may incur by making financial decisions that are based on the content and other information provided. You should consult with your financial advisor prior to you make any investment decision.

The advantages, features and deals discussed in the article are valid as of the date of publication on this blog and are subject to change without prior notice. The content herein is subject to additional product-specific terms and conditions, as well as any terms and conditions that are applicable. Please refer our website www.idfcfirstbank.com for latest updates.