RISKY
PERSONAL LOANS - These are unsecured loans carrying a high rate of interest(13-50%). These loans should be used as a last resort.
CREDIT CARDS - Most costliest form of Debt, carrying a rate of 40-45%. This is used to facilitate cashless spending.
TRAVEL LOANS - These as good as personal loans, not advisable for consumption purposes.
LESS RISKY
HOME LOANS - Low Interest Debt helps in Asset Building and doles out liberal tax benefits.
CAR LOANS - It has to be noted, that at first instance it may seem to be as good as a home loan, however there is 1 Major difference. This loan is for a depreciable Asset, unlike a house.Hence, it is important that EMI's do not exceed 25% of your take home salary.
PERSONAL LOANS - These are unsecured loans carrying a high rate of interest(13-50%). These loans should be used as a last resort.
CREDIT CARDS - Most costliest form of Debt, carrying a rate of 40-45%. This is used to facilitate cashless spending.
TRAVEL LOANS - These as good as personal loans, not advisable for consumption purposes.
LESS RISKY
HOME LOANS - Low Interest Debt helps in Asset Building and doles out liberal tax benefits.
CAR LOANS - It has to be noted, that at first instance it may seem to be as good as a home loan, however there is 1 Major difference. This loan is for a depreciable Asset, unlike a house.Hence, it is important that EMI's do not exceed 25% of your take home salary.
eg.Car Cost - Rs.7lac,
You Pay - Rs 9 lac(inclusive of interest),
Car value in 5years - Rs. 2-3 lacs.
LOANS AGAINST INVESTMENTS/PROPERTY/GOLD - Lets you unlock your assets value without liquidating them, at interest rates lower than personal loans.
LOANS AGAINST INSURANCE -Ideally this is the first Secured Avenue that should be tapped, given the low interest rate and convenient repayment schedule.
TIPS - i) Plan a Debt Management Strategy
ii) Max. to max. dont exceed 30% of your take home salary in paying EMI's.
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