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Personal Loan Options - Lowest Interest Rate for Loans against Gold, FD or Insurance Policy

How to get Cheap Personal Loan?

The best place to get a low-interest personal loan: Many people take loans to fulfill life requirements. This requirement can be buying a new house or for a treatment of any diseases or anything for that matter. A mortgage loan can be a good option for this. Under this, one can take a loan in place of gold, bank FDs, insurance policy and other such things. This loan comes in secured loan category and hence its interest rates are lower than that of personal loan. With the following article, we aim at telling you how one can get cheap personal loans.

This article will help you understand how your gold or gold ornaments, fixed deposits or insurance policy can help you get personal loans at cheaper rates.

Personal loan with gold

The gold loan can be taken from the market at lower rates. Gold loan is a secured loan. In this type of loan gold or gold ornaments are kept as security and a cheap personal loan is taken. Paperwork is very less in this type of loans. Many banks other than Muthoot Finance and Mannipuram also offer gold loans.

The interest rate of gold loan depends on Loan to Value (LTV) ratio. For instance, if you agree to take less loan on gold that you are going to mortgage, interest rates will be lower. That is if you mortgage more gold and take less money in return, you get benefits of rates.

Loan with fixed deposits 

Post office or bank fixed deposits are very useful in taking a cheaper personal loan. After gold, it is faster and easier to get the personal loan with fixed deposits. Your fixed deposit should be at least one year. Usually the interest rates of these loans in 1-2 percent more than the interest rates on fixed deposits.

Processing time for this depends on banks but usually, this takes around 2-3 days only. Usually one can get a loan of up to 80 percent value of the fixed deposit amount. Payment of the loan has to be done in the time period of fixed deposit.

Cheap personal loan with insurance policy

An insurance policy can also be used to avail the cheap personal loan. Loan obtained in place of endowment policy comes under secured loan category. The interest rates of this are lower than that of personal loan. And 3 percent more than the base rate.

The amount of loan avail in place of endowment policy depends on surrender value of the policy. One has to assign the policy to the bank. If a person taking loan returns it to the bank on time then bank again reassign the policy to the person. If the remaining amount and rate equal the surrender value then policy if foreclose.

Loan with shares and mutual funds

If you want to increase your loan amount then taking a loan with the help of shares and mutual fund is a good option. Investing in shares and mutual funds give good returns. These shares in times of need are useful in getting a loan too. For this documents needed are- identity proof, signature, address proof, transfer deed, demand place form and more.

Interest rates of this are lower as compared to personal loan. Usually, this is between 10-12 percent. The loan cannot be avail in place of all shares and mutual funds. One cannot get a loan for equity linked saving scheme. One can get a loan up to 50-60 percent value of the mutual fund or shares units.

Points to remember while taking loan

Always note and remember the time to pay off the loan. Car and housing loan are long term loans. But when these loans are taken with gold and fixed deposits then they are for few months to one to three years. Also take that whatever you mortgage bank gives you 80-85 percent of the loan in its place. However, many private firms are ready to give 100 percent loan too.

So next time when you plan to take loan do remember above points to get the loan at cheaper rates.

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