Here is Why You Should Consolidate Your Existing Debts and Liabilities with a Mortgage Loanadmin | November 6, 2020 | 0 | Loan
If you are considering getting a significant line of credit to clear out each of your existing financial liabilities, a mortgage loan can certainly come in as a handy resource. Besides, a mortgage loan in India is easy to procure, provided you have the requisite set of documents to offer.
What is Debt Consolidation?
Debts can be extremely hazardous to your financial well-being. However, not every debt is bad as only credit can help improve your credit score, if and when repaid in time. The problem arises when you have several debts to account for, especially the ones related to credit cards and other revolving credit lines. Besides, debts accrue interests and, therefore, consolidating them as one single outstanding loan is a much better option than to take care of several loose ends, variable interest rates, and snowballing liabilities.
Why get Mortgage Loans for Debt Consolidation?
While there are quite a few loans to account for, a mortgage loan or rather loan against property comes across as your best chance towards debt consolidation. Here are some of the reasons why you should immediately consider applying for a mortgage loan to shrink your financial liabilities, considerably:
1. Lower Interest Rates
Credit card loans are indeed calculated at almost 35 percent, in case you fail to make payments or only release the minimum amount in each cycle. Similarly, liabilities concerning multiple credit cards and even personal loans are calculated at the highest possible interest rates by the concerned lenders. This is where a loan against property comes in as a handy selection owing to the lower mortgage loan interest rate. As mortgage loans are secured loans, lenders do not charge exorbitant interest rates and persist with a 12 to 15 percent ballpark.
2. Zero Prepayment Penalties
Once you pay off the outstanding debts using the mortgage loan, you can even consider prepaying the same in full, if and when possible. Provided you have a sufficient corpus at your disposal, prepaying the mortgage loan is a good option as there are no foreclosing charges to account for.
3. Longer Repayment Tenure
The best thing about a mortgage loan in India is that it can be applied for getting access to a sizable sum of money which can be repaid over years. This way, it becomes easier to choose lower EMIs and keep the short-term financial health, intact. The ability to opt for longer tenures clubbed with zero prepayment charges make the mortgage loans extremely desirable debt consolidation resources.
Considering you have a sizable property to mortgage, you can procure almost 60 percent of the total property value as your mortgage loan amount. The entire sum allows you to follow an all-encompassing debt consolidation approach, thereby helping you close almost every outstanding account, regardless of the debt amount.
Besides the lower mortgage loan interest rate, it is the flexibility of the process and higher chances of approval that make a Loan against property your best bet for consolidating several outstanding debts, at once.