In today’s time, when there is a sudden need of money, people take help of different types of loans. But many times people take wrong decisions due to lack of correct information. Before taking a gold loan, loan against property, car loan or education loan, it is very important to understand some important things.
Gold loan for short term needs
If someone needs money for a short period of time, then gold loan can be a good option. In this, you can take a loan from a bank or NBFC by mortgaging your gold jewellery. Generally, this type of loan can be taken for six months or more. Once you clear the entire dues, the bank returns your jewelery safely.
Loan can also be availed for building a house on a plot
If you already have a plot of land and want to build a house on it, then a construction loan can be taken from the bank. But for this it is necessary that the name of the owner of the land is included in the loan application and is also recorded in the documents of the Registrar Office. Only after this, banks usually proceed with the loan process.
Loan against property is cheaper
Generally, loan against property i.e. Loan Against Property (LAP) is cheaper than personal loan. The reason for this is that in this the bank has the property as mortgage. The shorter the loan tenure, the higher the EMI. Therefore, it is better to choose such a period in which the installment can be paid comfortably.
Second-hand car loan rules
If you take a loan to buy an old car, its interest rate may be slightly higher than that of a new car. While buying a car, one must take RC book, valid insurance and record of insurance claim from the seller. The finance company also makes its own assessment of the value of the car.
Repay high interest loan first
If a person has more than one loan and wants to clear them quickly, then it is considered better to repay the loan with higher interest rate first. If the interest rate on both the loans is the same, it may be wise to clear the top-up or renovation loan first.