The Ultimate Guide to Secured and Unsecured Personal Loans
These loans are taken for a specific use such as buying a home or car or using in business. There is another kind of loan which is a multipurpose loan and can be availed for any kind of use of the borrower. Such loans are known as Personal Loans. Blog: https://financebuddha.com/blog/the-ultimate-guide-to-secured-and-unsecured-personal-loans
These loans are taken for a specific use such as buying a home or car or using in business. There is another kind of loan which is a multipurpose loan and can be availed for any kind of use of the borrower. Such loans are known as Personal Loans.
Blog: https://financebuddha.com/blog/the-ultimate-guide-to-secured-and-unsecured-personal-loans
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Eligibility criteria for a secured loan<br />
Just like any other loan, one has <strong>to</strong> fulfill some of the criteria determined by the<br />
lender <strong>to</strong> avail a secured loan.<br />
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One must have assets which he can use for the security of the loan. <strong>The</strong><br />
market value of the asset must be more than the value of the loan required.<br />
<strong>The</strong> minimum age of availing a loan is 18 years.<br />
<strong>The</strong> applicant must a citizen of India.<br />
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<strong>The</strong> income of the loan seeker is also checked as the income only determines<br />
the repayment capacity of the borrower.<br />
Types of secured loans<br />
As mentioned above, all personal loans are the multipurpose loan. On the basis<br />
of the collateral, there are different types of secured loans. Here are the <strong>to</strong>p 4<br />
types of secured loans.<br />
Loan Against Property– A loan against property is the highest availed secured<br />
loan. One can collateralize their residential, rental or commercial property<br />
against the loan. While availing this type of loan, one has <strong>to</strong> submit the title<br />
deed of the property <strong>to</strong> the lender. But it doesn’t mean that they cannot use the<br />
property. <strong>The</strong> property can still be used by the borrower. <strong>The</strong> highest loan<br />
amount will be 60% <strong>to</strong> 70% of the property value.<br />
Home Equity Line Of Credit– A home equity loan is a secured loan which is<br />
taken by keeping the equity or the share of the borrower’s home as collateral<br />
even when the home loan repayment is still going on. With Every EMI some<br />
amount of principal is paid. So the principal amount which is already paid <strong>and</strong><br />
the down payment of the home <strong>to</strong>gether forms the equity or the share of the<br />
borrower on that asset.
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