As you go through life, you find there are a few moments when you need to take a leap of faith. Only then can you achieve greater success and glory. For instance, you may have started a business. But, to steer the company through its initial stages, you have racked up numerous debts, due to which the company is mired in multiple debts. To ease the situation, you need a large capital inflow. However, the only option you can foresee to get out of debt is to sell your house. But before you do it, a good idea would be to see if there are other options.
While mulling over various options, how about a Loan against Property (LAP) at this crucial junction? It is simple, easy and a lot less risky than selling your house. Here’s how you can ease your debt this Diwali with a loan against property in India.
Loans are a Part of Life
Loans are crucial and can help ease money issues at various stages in life. Different loans help you meet different financial goals. The Property Loan Interest Rates are quite low, thus provides you with better options. There are secured loans like home loans and unsecured loans like personal loans or even debt from credit card usage. When you service a loan and pay off the interest regularly, your credit score gets a good boost.
However, the problems begin if you are unable to control your debt. Festivals such as Dusshera and Diwali call for added expenditure, and in doing so, you can get carried away and rack up a huge debt on your credit cards. With multiple obligations, you may have to juggle between different interest rates and EMI payments. Soon, you may end up channelling a significant portion of your savings towards loan payments. Very soon, you find yourself with a lighter bank balance. This Diwali take a loan to end all loans. Use the loan this Diwali to consolidate all your debts.
Remove a Thorn with a Thorn
Vedic scriptures say, ‘use a thorn to remove a thorn”. The same principle could apply here. Debt consolidation is a type of debt refinancing where you take a new loan to pay off other debts and loans. In effect, all your liabilities get combined under a single umbrella; i.e. a single larger loan. You may wonder if it is a good idea to take out another loan when you already have multiple outstanding debts. In reality, it is the only viable option to simplify your finances and repay your debt.
Give your Debt a Diwali Break with a Loan Against Property
A loan against property is a great way to consolidate all your debts and avoid servicing multiple debts in a month. A Loan Against Property (LAP) is a secured loan where your property (personal or commercial) is kept as a mortgage against the loan. The bank or Non Banking Finance Company (NBFC) offers you a loan based on the current market price of your property.
Why a Loan Against Property is Perfect for you
Lenders generally offer an amount that is around 50-60% of the market value of the house. Since city houses command higher realty prices, you can get a substantial amount of money through a loan against your property. Loans equal to Rs. 1 crore to salaried individuals and Rs. 3.5 crores to self-employed individuals.
A loan against property is a secured loan. As a result, the rate of interest on your loan is much lower than other available debt options. And when you choose a LAP, you have to service only a single interest rate payment. This brings down the total amount you have to pay towards loans each month.
Additional Read: Consolidate Festival Season Debt with Mortgage Loans