When Does a LAP Prove to be Better Than a Personal Loan?

Personal Loans are of two types – secured and unsecured. One of the most common secured Personal Loans is ‘Loan against Property,’ also known as LAP. Let us compare the Unsecured Personal Loan with a LAP.

Unsecured Personal Loan

  • Easy to apply
  • Simple eligibility criteria like a regular source of income and an excellent credit score in the range of 700 and above
  • No collateral required
  • Banks do not seek details of the end use of funds
  • Repayment tenure up to 5years
  • Amounts up to 50Lakhs

LAP

  • Easy to apply
  • Similar eligibility criteria, but banks are not so stringent with the requirement of credit scores in the range of 700 and above. You can get LAP with credit scores in the range of 650 and above as well.
  • Collateral in the form of equitable mortgage of property in the name of the borrower
  • No need to disclose end use of funds
  • Use for a variety of purposes like catering to marriage expenses, medical emergencies, higher studies, and so on.
  • Repayment tenure can extend to 20 years
  • Amounts up to 40% to 90%of the value of property depending on satisfaction of income criteria and take-home pay norms

Which of the two products is better?

It depends on various factors:

  • Requirement: If you are looking for a small amount (say under 10Lakhs), you need not provide collateral. You can avail an unsecured Personal Loan and save the collateral for the future. However, if your requirement is significant (more than Rs. 10Lakhs), it is better if you go for a LAP. You get higher eligibility when you opt for a LAP. Banks have products where they offer up to 90% of the value of the property subject to the satisfaction of other eligibility criteria like income and repayment capacity.
  • The rate of Interest: The rate of interest on a LAP is less as compared to the rate of interest on an unsecured Personal Loan. A low rate of interest coupled with a more extended tenure results in a low EMI. It can increase your eligibility subject to the satisfaction of other criteria like the value of the property, and so on. Therefore, a LAP is a better option compared to an unsecured Personal Loan.
  • Income Tax benefits: A LAP is a Personal Loan. However, you get income tax concessions if you can prove that you have taken the loan for purchase/construction/repairs and renovation of the residential If the purpose of your loan is repairing your home or arranging for margin to purchase new property, you can claim the benefits of the concessions in Income Tax as applicable to home loans. However, you should have the necessary documentary evidence to prove the nature of expenses. Under such circumstances, a LAP is a better option than a Personal Loan.
  • Time factor: Banks approve and disburse Personal Loans within 72 hours. It is not the case when you apply for a LAP. Banks and NBFCs (Non-Banking Financial Companies) follow a different process when dealing with a LoanAgainst Property Application. There are more formalities like verifying the genuineness of the title of the property, evaluating the property, completion of equitable mortgage formalities, and so on. These formalities take time. If you are in urgent need of funds, then the Personal Loans are the best options. However, if you prefer to bide your time, you can opt for a LAP.
  • Cost factor: A Personal Loan does not cost much to the borrower. Banks charge processing fees usually up to 2% of the loan amount. However, a LAP can see you spending more than what you do for a Personal Loan. You have to pay the processing fees. Also, some banks require you to pay for the legal scrutiny and evaluation process as well. You have to pay the stamp duty for the equitable mortgage. Registering the equitable mortgage with the SRO costs you money. Hence, from the cost angle, a personal loan is cheaper as compared to a LAP.

When is a LAP a better option?

A LAP is a better option to a Personal Loan in the following circumstances:

  • Your requirement is high
  • You wish to have a more extended period of repayment
  • You have the collateral to offer
  • You do not want to pay high interest on Personal Loans
  • You look forward to claiming Income Tax concessions

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Payday loan: instant cash without any stress

It is payday loan that is becoming very popular all over the globe. The reason behind its popularity is the service that people are getting. If you will compare the other sources that provide loan then you will always prefer payday loan. This loan is better for those people that are in need of emergency cash to pay their bills. The loan that might have the capability of getting more but you must take the loan that you are in need. It is having little more rate of interest than of the bank. But bank never provide the loan that is short term. If you like to have loan and capable of returning fast then this is the most suitable loan system in the market.

Online payday loans no checking account for getting loan

You can get the online payday loans without any account checking. It is online payday loans no checking account is available. These are the loans that will never check the status of your account. If you are bad creditor earlier in any lenders then there will no effects here to have the loan. You are getting the advantage to get yourself on the right path and stand on your feet again. There are numerous of people that have taken the loan from here and have made their life wonderful and happy. There is no other way that you can have such fast cash. It is one day process and in one day only the money will be in your account. There is no stress that one will have for getting such loan.

Payday loan: one can stand on his feet

Now you are able to take the loan on the same day with payday loan. If you will be thinking that you might get caught with bad creditor that you were in the past with any other lenders, then you are very much wrong because online payday loans no checking account facility is available. In this the lenders will not check your previous credit with any lenders. It is simply the best because you can take the loan that depends on your salary. There are reliable lenders that understand the circumstances that you are going from and they like to provide the best service in which you have the chance to stand on your feet again.

Say No To Financial Problems With The Right Loan

Someone has rightly said that fiscal independence, i.e. sufficient funds in our hands are a must to live and work comfortably. However, almost all of us are often challenged with financial constraints due to one reason or the other. It could be hospitalisation, the marriage of someone near to us or other heavy expenses. We often raise loans from bankers or money lenders. Bad credit payday loans are the right answer to such difficult situations. It is suggested to fulfill the legal formalities before asking for such money from bankers, money lenders or other guys so that you do not get entangled in any future difficulties.

Various loans – Financial institutions often facilitate following usual types of loans for the borrowers:

Loans on the instant basis – Recent years have witnessed sea changes as regards facility of loans. Banks nowadays provide loans on an immediate basis as they know that good returns can be gained in the form of sufficient interest. So they and the money lenders do not waste much time to facilitate loans. No hard and fast rules are implemented for providing money in the form of bad credit payday loans. The borrowers are at great ease.

No-security loans – Many bankers and private money lenders do not ask for any security when they facilitate such loans to the borrowers. The latter do not need to furnish any security for raising short-term loans to meet their immediate needs of money.

No credit-check loans – Few banking institutions do not hesitate in providing loans without initiating any credit checks. The needy guys are not compelled to provide checks on their credits that are a great boon for them. Many banks do not mind facilitating loans without credit history check or the legal opinions too. The borrowers that do not have good credit records are a big benefit.

Dynamic or direct lender loans – the Financial crisis can be overcome with such types of loans. The borrowers are not subjected to any extra fees and they are at liberty to pay the loans in easy installment in accordance with their repaying capacities. No hard and fast rules are applicable for such loan facilities. Known as the dynamic loan, this is the best option. Then there is the direct lender loan that can be availed up to the maximum amounts. The wise money lenders and the state-owned commercial banks are the right sources for such types of loans.

Best choices – the Financial crisis can be kept at the distance by raising any of the above loans apart from other loan facilities. The choice is yours but beware of abutting some dishonest money lenders. They could dupe you with hidden charges and other complications. So consult your chartered accountant or other consultants that are experienced enough in the field of loans. Why not raise loans from the government-run banks or other financial institutions that are controlled by the centralised state banks. Be wise to check the terms and conditions since mentioned in the documents.

Bad credit payday loans are good to get rid of the financial crisis. But be wise to utilise the money in astute manners.