A personal loan is easy and fastest way to get instant money in the situation of any financial need or crunch. But, one should not consider it as first and foremost option to get easy money. One should not lurch on this option to meet his/her daily requirements. However, this loan is easily available and banks lure customers with different schemes and offers to avail personal loans. You should remember that these loans are expensive, with higher rate of interest which may vary from bank-to-bank. It could range between minimum 15 percent and maximum 20 percent or more.
Let’s have a look at other alternatives which may prove more beneficial and relatively less expensive compared to personal loan.
Take a loan against Fixed Deposit: This is one of the best and easy way to get a loan. No bank can deny you to avail a loan against your fixed deposit. The interest rate of this loan is comparatively very cheaper. You are required to pay interest of 1-3 percent above the fixed deposit interest you are getting. For instance, HDFC is offering a loan on fixed deposit with an interest of one percent above the fixed deposit rate of 8.75% for a one-year deposit. Generally, banks offer loan equivalent to 80-90% of the amount of fixed deposit.
Top-up Home Loan: What is a top-up home loan? It is an additional loan on your existing home loan. There is one benefit of this loan, as personal loan here too you are not required to show how you are going to utilise this top-up loan. This is available to customers who have paid the equated monthly installments for minimum six months to one year. Though, this loan is available on a higher interest rate compared to home loan, but no doubt it is always less expensive in terms of personal loan. The tenure of top-up loan generally range between 15-20 years or till the maturity of your home loan, whereas personal loans are offered for maximum seven years.
Loan against your residential or commercial property: If you own any kind of residential or commercial property, you can consider of taking a loan against that. It is always easier to take a loan against the property. Mostly banks lend a loan upto 60 percent of the value of your property. However, different banks charge different rate of interest on loan against property. It could range between 11.30-13 percent.
Go for gold loan: Going for a gold loan is always a better option as compared to availing a personal loan. You can take a gold loan against gold coins and ornaments. It is easy to avail and faster disbursal as less documentation and paperwork is required. Although, the tenure of repayment is shorter than personal loan. These loans are available for upto one year. The interest rates may vary from bank to bank, but mostly banks charge between 12.50-14 percent.
Loan against PPF account: The banks can offer you a loan against PPF account. You can get a loan upto 25% of balance available between the third and sixth financial year after opening the account. The rate of interest will be two percent higher you are receiving on your PF. You are required to pay the principal amount within 36 months while the interest amount should be paid in two installments after the principal amount is paid.
