If you are a homeowner and you need some money to be borrowed, then taking a secured loan against your home is a sensible idea. Loan Against Property is a plan where you provide your home as collateral and borrow money against it.
Now the question arises that should you put your home at risk or borrow money against your property? Here are some points that you must consider before making a decision:
How can I borrow against my home?
The main way to borrow money against your home is through a secured loan. A secured loan is a loan that requires you to place collateral to secure the loan amount usually your property. Under this plan, you are putting your home forward as a security to the bank that you’ll pay the loan amount in time.
What are the risks?
The main risk of borrowing money against your home is that you are putting the property at risk. In case, if you do not pay the loan, the lender can put the property for sale.
What are the benefits?
1. Ability to borrow more: This is possible as it depends upon the credit score and the value of the property. There is no upper limit to borrow money. Although, if you borrow a large amount of money, then you need to be very careful and ensure that you can repay it on time.
2. Cheaper Borrowing: Applying for a loan against property can be cheaper than a personal loan. This is simply because the lender has some other source of collateral for the loan, rather than simply your word you’ll repay. The interest rates offered to you will be lower than offered on unsecured loans.
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