What is Loan

Whenever we need money, we borrow money from others. This process is called a loan, whether it is a bank or a person, or any other organizations.  We have the option of a loan but which would be the best loan option? This question is very important for us.

It has many options. You can take an FD loan, gold loan, or mutual fund loan. A personal loan is also an option. Everyone has their own advantages and disadvantages. Interest rate, instant loan facility, and less document requirement are its parameters. Which option is best for a short-term loan based on this? Let’s understand…

Some Types of Loans

FD (Fixed Deposit) Loan

You can take a loan against bank FD without breaking it. In this way, along with the benefit of maintaining the savings deposited in the bank, one also gets the necessary cash.

The interest rates (12-15%) applicable on FD loans are also lower than personal loans. This loan is also easily available immediately. Also, there is no need to submit many documents to the bank for this. Savings also remain intact along with debt.

Gold Loan

Gold loans have become attractive these days as gold prices have reached Rs 75,000 per 10 grams. Now you will get more loan than before on mortgaging jewellery.

Compared to personal loans, interest is charged at a lower rate (10-12%). However, if you default on loan repayments, your gold may be confiscated. Additional charges may also apply. in gold loans interest rates will be low.

Mutual Fund Loan

Mutual funds can be used as security for loans. Its interest rate is currently 12-14 percent. In this, long-term investment is also maintained and necessary cash is also available.

However, there are ups and downs in the stock market. If the price of mutual fund units falls before the loan is repaid, you may have to sell additional units to maintain the loan ratio.

This may cause harm. This aspect should always be kept in mind. before investing your money in a mutual fund, you have to keep in mind market risk.

Personal Loan

This year 17-18% interest has to be paid on personal loan. These are one of the best options to meet your immediate need for money, but they must be repaid quickly.

But avoid taking loans on credit cards. 30% or more interest has to be paid on these annually. However, other options are better in terms of interest rates. in personal loans interest rate is high as compared to other loans.

Which Loan is Best

You should keep some things in mind before taking a loan. Which loan has what interest rate? Take only that loan in which you have to pay a low interest rate and you get high returns.

If we talk about mutual funds, we get good returns there. But there is also a higher risk of losing money.

In all these, the decision should be yours as to which loan you should take, because the money is yours and you will have to take the risk, so you will have to take the loan wisely.

The most important thing is that before taking a loan, you should carefully read the all terms and conditions of the banks or from whomever you are taking the loan, do not take any loan without reading them.

FAQ About Which Loan is Best

Q. Which type of loan is best?

Ans. There are many loans such as Personal Loans, Mortgage Loans, Home Equity Loans, Small Business Loans, Payday Loans, etc.

Q. Which bank is best for loans?

Ans. SBI, PNB, HDFC, BOB, etc.

Q. Which loan is the lowest interest rate?

Ans. In gold loan, home loan, car loan, interest rates will be low.

Q. Which loan is popular in India?

Ans. Home loan, personal loan, car loan, etc.

Q. What type of loan is the safest?

Ans. FD, Gold loan.

Q. Which loan is best home or personal?

Ans. Home loan.