The current scenario of the finance industry states that so many doors have been opened now for the lending options that are specifically tailored to fulfill every need of borrowers. Financers these days are aware of this fact that their customers can face any kind of expenses; whether it is a planned one or an unplanned. Henceforth, there are various types of secured and unsecured loans available that can be available or you can say that they can be availed. However, in case you are looking for home loans then you can undoubtedly go for the home loans that are offered by IFL Housing Finance. We offer a variety of home loans that can satisfy all your needs.
By the way, these days, two categories of home loans are getting popularity among people and they are Loan Against Property and Business Loans. For making a clear understanding of what actually these terms are, you need to take a look closely and analyzing the difference between them.
Understanding Difference Between Loan Against Property And Business Loans:
Loan Against Property:
As the name suggests, Loan Against Property such a loan that is availed once you have kept a property as a mortgage. Henceforth, it is considered to be a form of a secured loan. For an instance, in case a customer is in an urgent need of money and possesses a property, then he is eligible for the Loan Against Property where he can keep his property as a mortgage to banks or non-banking financial companies or NBFCs. One of the most notable things here is that the property surely needs to be self-occupied. Apart from this, approval of the loan depends upon the value of the self-occupied property and the capacity of repayment of loans. It is necessary that value of the property needs to be enough that it can cover the amount of loan that you need to have.
What is the best part about Loans Against Property is that it can be used for multiple purposes but it needs to be clarified at the very beginning to the financers. Apart from this, the amount of loan should be utilized for that purpose only and the procedure of approval of the loans should be a legal activity. Most of the times, such loans are used for fulfilling business needs. For instance, when someone desires to expand his business, then he can get the loan approved. There are some personal uses where one can take Loan Against Property, like, a child’s higher education, their marriages, etc. Such type of loans can be very helpful when any sort of medical emergency knocks your door at an instant.
Business Loan:
Business loans are tending to be much focused and it can only be approved once, there is a need for fulfilling business requirements. For example when a person wants to expand his business in broader senses or purchase some equipment for business needs. Offering such business-specific needs of an individual, Business Loans can also be considered as a type of unsecured loan that depends on the type of business and nature of the loan. There are various forms of Business Loans that are easily available to the borrower. For instance, Term Loans, Working-Capital Loans, Equipment Financing Loans like Plant and Machinery Loans or else, Medical Equipment Loans. However, all these types of loans are available to the requirements of the borrower and it all depends on the borrower to choose the right option that can efficiently fulfill his/her needs.
Which is best? LAP or Business Loans?
When you are having numerous options for having loans, then it becomes quite indispensable to choose right option wisely. Apart from this, the loan should fulfill all the respective needs of the borrower without overburdening him/her with the prices of a product more than its original value.
It is always said that everything should be done on perfect timing. Henceforth, one should opt for the Loan Against Property only when he or she owns a property and desires leverage value of that property to get a quickly approved loan by keeping the property as a mortgage. One of the most important points that are to be noted here is the total eligibility is absolutely dependent over the value of the property that is to be mortgaged.
Apart from this, the capability of repayment also matters a lot during the approval of Loan Against Property. Such loan options are best for those who run a small business and need some amount for either starting their startup or to expand it to broader areas. Besides all these, Loan Against Property is one among all most preferred choice of the product when the borrower is in an urgent requirement of liquidity due to any of the personal reasons, be it marriage, the child’s higher education or even improvements in the home.
One should go for the Business Loans only when there is a need of relatively good amount of funds and is eligible to show decent years of continuity in the growth of the business with an amazing track record. Apart from this, the business should also be remained sustained. In these types of loans, various banks or NBFCs will not judge the person by the personal worthiness of credit but also by the current business’s creditworthiness with the help of past records of repayments that are associated with the business as well as owner.
The advantage of Business Loan is that the value of the loan that can be accessed is not dependent on the value of borrower’s residential or commercial property. However, in terms of security, this loan is not much secured as compared to other loans like home loans.
By the way, in case you are making up your mind about getting a home loan then you can undoubtedly trust IFL Housing Finance. This is because they offer numerous types of home loans to their customers.
Conclusion
One must go through a thorough analysis of requirements for which he/she has to take loans then whether it be Loan Against Property or Business Loan or Home Loan. The requirements, value, amount, repayment capability and past records all are important factors of loan approval.