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Things To Keep In Mind About Registration Loans 2 years ago

The type of loans in which an applicant is mandatorily required to keep an asset as collateral is called registration loans.The popularity of registration loans has increased by the virtue of two main reasons:

  • The credit rating of the applicant is avoided while deciding the competency for the loan. Now what is credit rating? Credit rating is an evaluator of how worthy a person is to take or borrow credit regularly or with respect to a specific financial obligation.
  • The process of approval of loan is very quick and non cumbersome. The past activities and ongoing loans does not affect a lot while you opt for a registrationloan. An applicant can apply for loans from as low as 10000rs to any desired amount and get the money quickly and without much time devoted to legalities.

Registration loans in Phoenix are mostly taken by financially constrained individuals or by those individuals who are in urgent need of fast monetary capital without any delay for long paperwork and legalities.

If we talk about how a registration loan in Phoenix works, its functioning is quite easy and simple. In a case where a potential loan seeker owns an asset and opts for a registration loan, the asset is signed its registration to the lending company and that company will lend up to some percentage ( say twenty to thirty percent) of the assets total value at that particular point of time. The registration signed in the name of the loan company is kept as collateral in this situation.

Tenure of registration loans:

The time duration or the ‘tenure’ of the loan varies from fifteen to thirty days. This means that the money borrowed against the asset has to be paid back to the loaning company by the end of twenty to thirty days. Although, this duration can be extended depending upon the amount lent, relations with the lending firm or company and loyalty of the borrower. There are various methods to payback the loan as well. The loan amount can be paid in a one-time single payment, that is, once the borrower gets the money in hand, he may return the loan amount in one single payment. Other than this, there are other plans such as multi- year instalment plan in which instalments are due on the borrower and they have to pay it in accordance with the loan agreement.

Demerits of registration loans:

If the borrower defaults in making payments back to the loan company, the asset may again be possessed by the same company, until the due amount is repaid. These and many other points related with registration loans, makes it a little risky for a person to opt for it. These loans tempt by appearing as an easy and fast option quick cash in financially straining times but, it is linked with many market risks.The high interest rates and late fees are some of the many points that have the potential to lead a borrower into worse conditions than the prior ones.