Many first-time home loan borrowers tend to confuse home loan with loan against property and use the terms interchangeably. However, while the terms sound similar, they are different financial products. 

While home loans are a type of secured loan, you can avail of this loan only to buy or construct a new home. You can also use the loan to purchase a resale property. In contrast, when you apply for a loan against property or LAP, you already have ownership of the property, and you use it as a collateral to get funds against it. 

In this write-up, we discuss the key difference between housing loan and loan against property. 

Interest rate

When you apply for any type of loan, the interest rate is one of the important factors that could affect your borrowing decision. The higher the interest rate, the higher will be the EMI. 

When it comes to home loans, the lenders today offer the loan at competitive interest rate. Today, you can easily get the loan at an internet rate starting from 6.70% per annum. On the other hand, the interest rate for loan against property can be higher than the home loan. 

Hower, if you do your research well, and compare the offers from different lenders, you can surely find an offer that fits your budget. 

Repayment tenure

Home loans are essentially long-term financial products. You can easily repay the amount over a longer period. Generally, the lenders in India offer home loans for a maximum period of 30 years. However, you have the flexibility to choose the loan tenure based on your repayment capacity. If you can pay a higher EMI, you can reduce the loan tenure. 

In contrast, the repayment tenure for LAP or mortgage loan is much lower than home loan. You can avail of LAP for a maximum period of 15 years. However, it is a much longer tenure than personal loan, which comes with a maximum duration of 5-10 years. 

LTV (Loan-to-value) Ratio

Another key difference between home loan and mortgage loan is the loan-to-value ratio. It refers to the maximum value that the lender funds against the value of the property. 

When it comes to home loans, the lenders generally fund a maximum of 80% of the property’s value. You must pay the balance amount from your pocket. This is called down payment and it must be paid upfront. 

For LAP, the financial institutions decide the maximum amount you can borrow based on their assessment of the property’s value. Generally, lenders do not lend more than 50% of the property’s value. 

Usage

You can use the home loan only for buying a new ready-to-move property or an under-construction property. You can also use it to build your own house on the plot you own or allotted to you by the government. 

When you apply for a loan against property, the lender does not have any restrictions on the usage. You can use the money for any purpose you want, such as increasing business capital, paying employees’ salaries, taking a world tour with your loved one, home renovation, paying your child’s college fees, etc. 

Final Word

Now that you are aware of the difference between home loan and LAP, you would understand that they are different types of loans and serve different purposes. So, assess your needs and choose the right type of loan to suit your specific needs. 

Most people think that healthcare agents and healthcare brokers are the same, but they are not! It is paramount to understand their different roles to get a better idea. Insurance agents work in the interest of the company with the ultimate motive of generating revenue for the company. They also know the policies of only one organization, i.e. the one who they represent, whereas healthcare brokers work only in the interest of the customer as they are not bound to just one company, have a vast knowledge of all insurance policies, and are more accountable with high negotiation skills. If any customer wants to speed up the process, healthcare brokers can help well.

What exactly is the work of a healthcare broker?

Brokers are licensed professionals who sell insurance policies to potential customers and businesses. They are the ones who help you find the best and right plan for you or the employees of your company, of course, within your budget. The vast knowledge of brokers helps you choose the right one among the various insurance policies available. It helps you save both cost and time efficiently. The brokers are independent and understand your situation by asking you several questions related to your needs, such as questions on budget, medications you are already on, any insurance plan you already have, your medical history, etc. They will provide you with information on all the plans that fit well with your conditions. Before selecting a plan, do understand the positives and negatives, the pricing patterns of each plan, and which plans are ACA (affordable care act) or non-ACA marketplace plans.

The Advantages Of Having A Healthcare Broker:

Some of the benefits are:-

• Helps In Saving Your Time: 

The entire process of purchasing an insurance policy is typical as you need to invest a lot of time in finding the best insurance company, but with healthcare brokers, the work is done in just a few days as they are skilled and well versed in their work.

• They Are Unbiased And Work In Your Interest: 

The broker gives you a clear-cut picture of all the risks associated with different policies, which helps you make informed decisions. This minimizes your risk too and builds trust.

• Acts as A Mediator for the Claim Settlement Process: 

The broker is not just confined to helping you get the best deal; he/she is your savior too when it comes to claiming settlement. We are all aware of the sweat and energy we need to put in for claim settlement, but that rush is done by the brokers, effectively saving us.

• Provides Every Detail With Attention: 

They provide information on every policy that suits you and covers all your medical needs within a short period.

Conclusion

In your health insurance plan, the healthcare brokers do not keep anything coveted. They provide you with accessible information without the use of technical jargon, which helps you understand things better. For more information, you must visit any reliable websites on the internet.

Introduction: What is a Delaware Statutory Trust (DST)?

A Delaware Statutory Trust (DST) is an estate-planning strategy used to protect assets from creditors.

The DST has the same tax treatment as the grantor’s other property. The trustee has no obligation to distribute any income or corpus to the grantor or any other person but is required to distribute all of the income and corpus exclusively for the benefit of designated charitable beneficiaries.

What Qualifies as Income for a DST?

The term “income,” as it is used in the Delaware Statutory Trust Code, has a very broad definition. It can include income from any source, which means it does not refer to capital gains, tax refunds, or other things that are not actual income.

How are DSTs Taxed?

Delaware Statutory Trusts are a special type of estate planning tool that supplements the laws of trusts in Delaware. They are taxed at two levels: the first time when you transfer your assets into the trust, and again when assets are distributed.

This article will explore how a DST is taxed in various scenarios. It depends on how much income they receive from the trust for individuals. If there is more than one beneficiary, then the trusts can reduce federal income tax obligations for all beneficiaries over time. For corporations, it depends on whether or not they own 100% of the stock in a subsidiary. If they do not own 100% of the stock in a subsidiary, then the company might be deemed as an affiliated person.

The major distinction between DSTs and other types of trusts is that there is an initial tax liability incurred whenever assets are transferred into them. This tax liability can be spread over time by paying out annual interest to beneficiaries of these assets before distributing them to their beneficiaries.

Why Should I Consider Creating a DST?

For those who want to shield their assets but still have access to them, DST is a perfect solution.

The DST is a legal entity that anyone can create and own by anyone. It contains a trust document that lays out the entity’s duties, powers, and terms of ownership. The trust document also defines who is responsible for managing the trust’s assets and how they will be managed. It is often used by businesses looking to keep their finances more private or individuals wanting to keep their health and personal information more private.

One of the most important aspects of a will is determining what will happen to assets after death. This is where DST comes in. DSTs keep assets out of probate and offer peace of mind, which can help control the way assets are passed on to beneficiaries after their owner has passed away and eliminate any doubt and uncertainty about the process.

The DST is a very popular and effective strategy for bypassing probate and other potential pitfalls in the estate plan process. It also provides another layer of protection when it comes to protecting an individual’s assets from possible lawsuits, as any property that would otherwise be included in an estate plan such as a will or probate would instead be transferred to the trust.

The Advantages of a DST

Some of the advantages of a DST are:

• The trust is taxed in the most advantageous way.
• The trustee is not liable for trust debt or obligations, which frees up time or requires less personal attention to manage the trust.
• It has flexibility in terms of controlling distributions to beneficiaries.
• It can be funded by any property, including marketable securities, life insurance policies, retirement plans, and more.
• There are few restrictions on who can be a trustee or beneficiary.
• There are also a few restrictions on how the property within the trust can be invested.
• A statutory trust has no formalities that must be observed, which means even small children can create their trusts with little effort.

Disadvantages of a DST

The most significant disadvantage of a DST is the inability to control the future of your assets. This type of trust is irrevocable, meaning it cannot be terminated in the future. It also cannot be modified, meaning any changes to the trust would require approval from all beneficiaries and grantors.

DSTs have a common issue that causes a lack of liquidity. Generally, a third party to the trust would need to be involved for a distribution of funds to happen. This typically means that the trustee needs to sell trust assets before releasing any funds from the trust.

Conclusion: What Are the Benefits of Creating a DST?

The benefits of creating a DST include:

-Protecting assets from lawsuits and creditors

-Reducing estate taxes

-Avoiding probate fees

-Shifting wealth to future generations

All these benefits support that the DST is a guaranteed way of securing your property and assets for yourself and your loved ones.

Like any other professional, doctors too, have several financial records to maintain. Doctors who practice in their own clinic are money-rich but time-poor. While they have a multitude of documents and paperwork to deal with, they don’t have time to do anything. Doctors who practice in their personal clinics are bound by state and legal requirements like taxation, which is a financial matter that requires proper management. 

Even though doctors often wish to handle their monetary matters on their own, they usually don’t have the luxury to do so. Their demanding profession consumes their hours and this is certainly one of the reasons why doctors need to seek the help of accounting services for medical businesses.  

Doctors don’t have the expertise to handle their finances

Even though some doctors have the resource and time to deal with their money, it is not always the best thing for them to do. Intricate matters like financial management and taxation are complicated and need prior education. This is one of the reasons why professional accountants require passing an exam to get a license before they start practicing. 

Doctors already obtained their medical degrees but they might not have the same level of knowledge on financial management. Similarly, accountants are all backed by specialization, education, and experience to properly and effectively address all sorts of monetary matters. 

Doctors may commit financial mistakes that cost them in the long run

If doctors went to handle their finances, financial discrepancies would be too common. When they handle huge amounts of money, numerous bank accounts, and mammoth transactions, there are chances of discrepancies. Once you fall into trouble, spotting the error is another huge task. There are times when it gets tough indeed to notice the error. As a result of this, you may incur legal issues, fines, and even criminal charges. 

An accountant can help you solve such concerns. As they are well educated in these matters, they can spot errors in comparison with doctors. They are well-versed with the proper tricks and strategies to get the job done efficiently and correctly. They do it much faster than laymen. Having an accountant will help doctors to avert issues linked with financial discrepancies. 

Doctors may find financial management costly enough

When a doctor hires some professional to handle all his financial matters, this might seem like an added expense. However, you might not realize now that it is a cost-effective and efficient strategy. Whichever doctor keeps his financial records must be having an assistant who manages them on his behalf. The accountants have a wide range of expertise and skills that are required to get the job done perfectly. 

Medical accountants can deliver improved results, organize records and also solve financial problems with the help of medical accounts receivable service. They deliver stellar work all time. Can you imagine how much you’ll be able to save with a professional accountant like that? Hence, the demanding and busy careers of doctors are the main reason behind why a medical accountant is needed.