Learn about the different types of secured and unsecured loans and how you can make the most of them

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At some point, we all require a bit of extra cash to pull through with our expenses.

You may be wanting to get a dream house, pay your medical bills, or finance your education, but still might fall short of money. However, PNB Housing Finance can help you get out of the nasty situation by offering you a loan against property for all your needs. 

There are two broad categories for loans—secured loans, and unsecured loans.

Secured Loan

While opting for a secured loan, you need to put something on the line for the loan, which can either be your property, or other assets. In case you are unable to pay for the loan, the lender will take possession of the assets and liquidate them to recover the money, or might take the property. For example, PNB Housing Finance loan against property is a secured loan.

Home Loan

Lenders will provide you with a home loan as long as you are either buying some land intending to build a house on it, or building, buying or renovating the house. However, you also need to pay a considerable sum of money in down-payment while applying for a home loan. If you fail to repay the loan, you will lose your home and down-payment. 
However, the major disadvantage of this type of loan is that they are not as versatile as PNB housing finance loan against property. Hence, you cannot use this type of loan for all of your needs.

Loan Against Property

You can ask for a loan against property from PNB Housing Finance if you have a property that you can use as security, which can be a house or land that you own, whether it is a commercial or residential property. Lenders may give you up to 80 per cent of the property worth for funds in the form of a loan. 

While opting for a loan against property, select one with the lowest interest rate. 
Unlike home loans, a loan against property is a multipurpose loan. It means that you can use the loan in any way you need. You can use the funds for financial assistance for personal or commercial use. Moreover, since it is a secured loan, the PNB Housing Finance loan against property is swiftly approved. Moreover, PNB Housing Finance loan against property offers cheap interest rates and long duration to pay off the loan.

Unsecured loan 

When you opt for an unsecured loan, you do not need to provide the lender with any security or collateral to acquire a loan. However, it is difficult to get an unsecured loan, since the lender does not have any collateral for these loans. Unlike PNB Housing Finance loan against property, which has the lowest interest rates, the bar is set high for unsecured loans.

Personal Loan

A personal loan, just like a loan against property, can be a financial saviour for a wide range of purposes. You can use it for all of your personal needs. However, you will require a good credit score and a stable source of income to avail of this loan. 

Since lenders do not need collateral, they are even more cautious than while approving for a loan against property. Additionally, personal loans generally have a higher interest rate in comparison to PNB Housing Finance loan against property. 

Short Term Business Loans

Business people, traders, manufacturers, entrepreneurs, MSMEs, and organizations make use of this facility to take loans for their daily needs or new improvements. However, unlike PNB Housing Finance loan against property, short term business loans can only be availed for corporate needs.

Some loans may either be secured or unsecured. One of them is an educational loan. 

Educational Loan

The loan helps to realize your dreams, aspirations, and objectives of completing further studies in various disciplines. The most crucial benefit of educational loans is that they allow you to pay after you complete the course.
Furthermore, there is a moratorium period for student loans that include a year extension after completing the course, or half a year after finding a job. However, the drawback of this loan is that unlike PNB Housing Finance loan against property, it is only applicable for educational purposes.

Conclusion

Sometimes, you need a loan to get out of a financial problem, or to create a better life. In such times, it is better to check the loan you are getting into, to avoid further problems. You can check the PNB Housing Finance loan against property which offers the lowest interest rates for repayment.

Jyoti Dhiman
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