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Loan Against Security LAS is a simple loan with an underlying advantage. So many Indians are scared of having the financial responsibility on their heads. Most of them are afraid of taking a personal loan in a bank.
The mechanism works like this:
There is no collateral of the loan taken and hence no proof of property or gold or any valuable asset, can be required by the lender.
The bank does not involve any interest which results in the earning of the borrower, so it is a simple and straightforward process.
LAS is based on the concept of securities, which is a legal or financial instrument that represents an ownership or a claim to something tangible. These are well known as cars, houses, or gold.The borrower simply puts in his property as security for the loan and instant approval.
Bank keeps the property as security, while the borrower earns interest over the loan period and if he fails to repay the installment or return the property then the bank will sell the property, which has then to be paid by the borrower.
It is also very simple for the bank to retrieve the security through sale or when the borrower defaults. The seller also gets money as repayment from the bank in case of default.
The fundamental concept of such finance is very simple and basically the way that it works is as follows.
Government, with the help of Reserve Bank of India (RBI) has decided to do away with interest of small, unsecured loans by banks and financial institutions.
This step is to promote home loan-based small loans to the common man, since these are risk-free short term loans with a much higher return compared to normal bank loans.
And that is where Home loan against security (LAS) comes into picture.
Impressed by the good returns and zero credit risk, 90% of the Home loans are funded by security and high loan spreads, hence lenders of LAS are relatively small banks and financial institutions and
lenders like, GE Money, LGFV, DHFL and so on.
Basically the borrower puts in a deposit as security and the bank can sell the security if the borrower fails to repay or does not repay the installment for some time.
The concept has been adopted in various states like Punjab, Haryana, Maharashtra and Delhi.
Examples of LAS by banks like SBI and HDFC for monthly installments from a small amount like Rs 3000.
HSBC now providing 10-year fixed rate loan at 8%
Another good example is that of HSBC. Now if you buy a home worth Rs 30 lakh and pay monthly instalments of Rs 1.70 lakh, HSBC will give you a loan amount of Rs 40 lakh at 8% interest over a period of 10 years.
This is the difference in a home loan of Rs 30 lakh from HDFC and HDFC loan of Rs 40 lakh.
What Are Payday Loans with no credit check?
The introduction of The Consumer Credit Act 2005 in the United Kingdom made it illegal to charge for a payday loan without an approved credit check. It has been in effect since November 5th of 2007.
With this new law, banks are having to closely look at their own lending practices in order to be compliant with the law. Companies that use the traditional payday loan procedure are now having to compete against a handful of online payday lenders.
Click the more info Apply online for no credit check loans
Compare a site that offers payday loans with no credit check and check out the sites that offer them with a credit check.
As we’ve already mentioned, many of these sites have been around for years. Some also offer overdrafts and other short-term borrowing methods.
It’s important to be aware of the policies of a site offering payday loans with no credit check. Make sure you read and understand the policy and terms and conditions before applying.
Additionally, you should know that most of these websites offer payday loans for a week or for