With the different types of loans, the availability of funds has increased over the past few years. Due to an increase in funding by lenders, businesses are growing without any obstruction. Loans can be divided into two different types unsecured and secured loans.
In loan against property, one can avail benefits of credit by putting any property as a security of the loan. Loan against property loans is less as compared to that of unsecured loans.
LAP
After availing a Loan Against Property, one receives a certain percentage of asset value which is known as loan to value. If a credit is issued without any collateral, then this type of loan is known as an unsecured loan. Before applying for any business loan or taking a credit facility, one should keep certain factors in mind. Enlisted below are some considerations:
- Interest rate: Rate of interest varies from the type of loan you want to avail. The interest rate is determined based on the credit score of the borrower. Unsecured business loans generally have a high interest.
- Period of Loan: If longer tenure is chosen, then the monthly EMI’s are less. Loan against property offers a more extended period as compared to that of business loans.
- Eligibility:
To avail the benefits of any credit facility, you must meet the ability of the loan. For unsecured loan your credit rating, salary plays a crucial role in determining the eligibility.
Conclusion:
Before availing one of these loans, one must always compare different lenders. It is advised to know your requirement before availing any loan.
Additional Read: Essentials of loan against property that you should check
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