Previously we had discussed about secured and unsecured loans in India. Today, we shall speak about the loan alternatives that you can opt for in case you possess an asset.
- Loan against Gold: The best thing about gold loan is that the processing is quite quick as compared to other loan processing time. The gold loan is processed depending upon the security you deposit. The rate of interest is directly proportional to the margin of security you deposit. There are no pre-processing charges and not much documentation is involved
- Loan against your Insurance Policies: Some of the insurance policies are eligible to get you a loan. This can be known if you have a surrender value associated with your insurance policy. This is surrender value is available mostly after payment of 3 yearly premiums. If your insurance policy has surrender value then you are eligible to take loan that is close to 90% of the surrender value.
- Loan against fixed deposit: Like many people you too would have fixed deposits which you would not wish to break in case of an emergency. At such times, you can opt for a loan against fixed deposit. The interest rate charged would be 1-2% higher than the interest earned on your current FD and you can take loan for about 75-80% of the current FD.
- Loan against property: In this type you can opt for a loan against property which could be either residential or commercial. Banks can give loan up to 50% of the market value of the property. Usually this type of loan is opted for large amount of loan.
- Loan against other investments:
- Shares and Mutual Funds: You can opt for loan against shares and mutual funds too. However, there are only few approved funds and shares that can get loan sanctioned for you. Because of the volatile nature of value of shares and funds, you are likely to be asked for more margin while applying for loan.
- Public Provident fund: You can also opt for loan on your PPF account. However, you are eligible to opt for loan from the 3rd year to the 6th year and the loan amount will be only 25% of the balance in your PPF account 2 years back.
