Everything You Need To Know About Home Loan Emi Calculator

At some point, we will require cash for unforeseen incidents. The purpose could be medical, child’s wedding, higher education, travel, and so on. To meet these requirements, you should have enough funds at your disposal. The two most sought-after options are a loan against property and personal loan.

What is a LAP?

They are taken against the asset. The interest rates are towards the lower end. You can apply for the loan for residential, commercial, or a plot. A property loan is secured, and the asset is kept as collateral against the loan amount. The end purpose of the loan can be anything. The tenures are lengthy as well. Also, the amount depends on the market value of the property. Generally, banks and non-banking financial companies (NBFCs) offer a percentage of around 75 to 80 per cent. The down payment reduces thereafter.

What is a personal loan?

These loans are unsecured, and the end purpose can be anything. The loan amount maximum is INR 15 lakh and interest rates are high as well. Also, tenure is lesser.

How does LAP score over personal loans?

Interest rate: When you avail of any loan, the focus is on interest rates. Considering loan against property is unsecured, the interest rates are lower and attractive. On the other hand, personal loans involve no security. So, the interest rates are towards the higher end. So, LAP has the edge over personal loans with this regard.EMIs: If the interest rates are high or low, the effect shows on the EMIs as well. In this regard, personal loan EMIs are higher.

Loan tenure: You can repay a property loan in 5 to 15 years, depending on the amount and other factors. This is feasible, especially if the loan amount is significant. However, you will end up paying more interest. Personal loan clearance is not more than 5 years. This is possible only if the loan amount is not high.

Loan amount: LAP is handy if you want to a larger sum of money. The amount could be in crore as well. It all depends on the value of the property. The personal loan largely depends on the monthly income. The other factors that follow are credit score, age, etc. Here the repayment capacity of the applicant is crucial. The limit for the amount is anywhere between INR 10 lakh to INR 15 lakh.

Disbursal of loan: Since personal loans are unsecured and no collateral involved, the processing time is quick. They only have to evaluate your income and credit score. The application then gets approved in a week. Meanwhile, loan against property requires verification of property documents. So, the approval can take up to 15 to 30 days. You may even be asked for income proof.

Repayment failure: If you do repay the LAP, you stand the chance of losing your asset. Hence, plan carefully. In the case of personal loans, repayment failure can increase your interest rate, and credit score goes to negative.