What is your option, when you are in urgent need of a loan?. Generally people prefer to ask money from their friends & relatives. But they can really help you in the deadline, where you can really complete your needs? No, its very rare case, because no one keeps the high amount with them, they need time and money to give. Don’t look here and there, explore about the option you have with you to get the amount from yourself. Your asset is the best option to opt loan from. You can take the opportunity to use your assets as collateral to have a loan in case of emergency.
Here is the list of assets, which can fetch you a Loan:
Your property is the best option to take a loan against it. It just requires the legal proofs to be yours. It can help you to borrow a loan for various purpose, in order to expand your business, you requires money for medical treatment, wedding or any other purpose which requires high amount. You can take a Loan against commercial or residential property. You can take loan about 40%-60% of the loan amount from your property market value. The interest rate vary from lender to lender it makes range from 12% – 16%. The tenure of such loan can be up to 15 years or depends on the lender. The initial processing fee may be around 1 % of the loan amount also there will be prepayment and late fee charges too. And these differ from lender to lender.
If you’re looking for a short period of the loan or you want to have a low amount of loan then you can go for a gold loan. For gold loans, interest rates are lower than for personal loans. The interest rate for this loan may vary from 11% to 20%. The tenure for this loan is 12 months and it may go up to 5 years based on the lender. The amount that you can get out of for this purely depends on the loan to value ratio. It may range from 60% to 75% of gold value. The initial processing fees may usually varies from 0.5% to 1 % depending on the lender. In a case of failure of repayment within the deadline the lender auction off the gold to get the amount. Prepayment option is also there for this loan and there is no prepayment charges for this or depending on the lender it may levy.
Loan against insurance policies is also a good option to go for. You can lend up to 85% of the surrender value of the policy. And tenure for this loan cannot exceed the policy’s term though. The interest range may vary between 9%- 12%. The processing fee varies between Rs.200- Rs. 500. There are no prepayment charges for this loan and you can get this loans even you have a bad credit history.
Fixed deposits (FD)
In this loan, you can take loan up to 90% of your fixed deposit amount. But, the tenure must not exceed the FD tenure. The interest rate is 2% to 2.25% higher than the interest paid on the deposit amount. Plus point here is that you don’t stop earning interest on FD. Also, you no need to pay the prepayment charges and processing fees.
Bonds and National Savings Certificates (NSCs)
The interest rate for this loan may vary in between 3% to 4% above the base rate for the bond. That is 0.5% higher than the NSC rate. The amount up to 75% to 90% of the face value of the bonds and NSCs, you can borrow. In this loan, tenure cannot exceed the security’s maturity date. There are no prepayment or processing fees for this loan. You can borrow an amount up to Rs. 10 Lakh against infrastructure bonds.
Stocks and Mutual Funds
You can make use of your stocks and mutual funds to lend a loan. You can borrow amount up to 50% to 80 % of the market value of stocks as overdraft limit. In case, of mutual funds, you have to consider the Net Asset Value. The interest rate ranges from 113% to 16%. The maximum limit for this loan is 20 Lakhs and it may extend based on the lender. The processing fee is about 2 % of the overdraft limit. There are no processing or prepayment charges applied here.
The loan against the assets is the best option to borrow. But, if you fail in prepayment, your asset will use by the lender to recover the loan amount.