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Why Should Why Think Before Taking A Loan Against Property
When you are giving a property as a collateral it is vital that everything is checked twice before you finally take a loan. Let us understand the disadvantages that may be associated with such a loan.
Loan amount is not specified: When a certain sum of money is needed, then you must not opt for Loan Against Property. The reason is that here the loan amount given will be according to the estimated to price of the property. This may or may not suffice your requirement. So even after mortgaging a property the loan amount you needed is not what you get, the purpose becomes futile. In such a case a personal loan can be taken. This will have more paper work but you will know the amount you are getting as loan.
Risk of losing the property: When a loan is taken after mortgaging the property, the tenure of the loan is rather long. But at times even after that the borrower is unable to repay the loan on time. This leads to an auction of the property. This is done by the bank to recover the loan amount. Therefore, if your income is not consistent and you have taken this loan as a Business Loan in Delhi, then be cautious. Manage the finances well so you are able to repay it, else, opt for another loan wherein at least the property will be safe.
Lower value of the property: The bank usually estimates the property lower than its actual one. This would mean that you will get an amount for loan that is much lower. This is done as the banks estimate the value of the property at a price lower than the usual market price.
Taking a Loan Against Property, or taking a personal loan, both has its set of pros and cons. One must be very judicious either an entrepreneur or a service man while opting for loans. In both cases there should be a regular and a consistent income. When a borrower does not have a good credit score and due to which cannot apply for Business Loan in Delhi, then it is difficult to get a personal loan. This loan is meant for such people, however, the constant of having a consistent income along with meticulous planning remains.
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