People take loans from time to time to meet their immediate financial needs. These loans can be secured as well as unsecured in nature. However, it’s important to pay your EMIs on time in order so as to maintain a healthy credit score. If you have multiple debts and you are repaying it on time, it can be fairly good for your credit score but not for your regular financial plan. Multiple debts mean you have to pay multiple interest rates. That means you will be paying much extra amount every month as interest rate,; so multiple debts or multiple loans can lead you to empty your pockets faster than you ever imagine.
To avoid paying multiple debts every month, you can reduce them to one by opting for a debt consolidation. Debt consolidation means bringing multiple debts or loans under one umbrella and the best way to consolidate your multiple debts is by choosing a LAP (loan against property).
With a loan against property, you can consolidate:
• Retail card or credit card bills.
• Student loans.
• Unsecured personal loans.
• Factoring loans, etc.
Benefits of availing Loan Against Property for debt consolidation
Here are the benefits of applying for LAP for consolidating your multiple debts:
Lower interest rate: Since LAP is a secured type of loan, the interest rates offered are lower as compared to unsecured loans such as a personal loan. Also, if you opt for LAP, you will have to pay only one interest rate. This way yYou will be able to bring down the overall amount you pay as interest every month. will be paying as interest rate every month.
Simple approval process: Availing a loan against property is much easier than availing an unsecured personal loan. The only thing which one needs to take care of is that the property title is should be free from any kind of mortgage litigations.
Flexible loan tenure: The tenure for a loan against property is relative longer unlike other loans.quite a long one. It can be available for the tenure as long as up to 15 years. A longer tenure creates less financial pressure on the borrower.
End-Use Flexibility: The loan amount availed through a Loan Against Property is free from any restriction or usage. The borrower can use the amount for several purposes such as medical expenses, home renovation, pursuing higher education, etc. A loan against property is a fit for all monetary needs.
Borrowing against different types of properties: To avail a loan against property, one can use various kinds of property. One can mortgage a self-occupied house, a commercial property as well as a rented residential property to avail LAP.
Pre-closure: The pre-closure of a loan against property is generally free from any charges or penalties. One can close a loan against property account by paying the outstanding amount sooner than the term decided. But the point to consider is that if your loan is on a fixed interest rate, you may need to pay a nominal amount in the name of prepayment charges.
Top-Up facility: A loan against property comes with a top-up facility. Just like a home loan or personal loan, one can take a top up loan on an existing loan against property. A top up on loan against property is provided by mortgaging the same property but with minimal paperwork.
Now that you are aware of all the benefits of LAP, you can consolidate your debts using it. It will save you from paying multiple interest rates.