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Second, the terms of repayment are more flexible with personal loans. The tenure for both home loans and loans against property is significant. A loan against property is also a high-value loan and takes several years to pay back. However, there are so many products in the market that a person can get easily confused.
You authorize us to use/disseminate the information to provide the Financial Solutions however it is not necessarily for you to act on it. It only serves an indicative use of information which you may execute in the manner agreed by you. Personal loans are usually for smaller amounts of money than mortgages and have more flexible repayment terms.
Home Loan Details
The executive explained to him in detail about the product and assured him of our best services. Will let you know in 2-3 days”, said the enquirer and the call ends. Later on 3rd day our executive follow-ups with the client, to learn that he has already made his choice to approach Bank A and have already submitted the documents for loan processing. On confirming the enquirer said that he found the rates were too high for him to apply with us. On the contrary, the executive explained, “Sir, rather the rates that we are providing is the lowest for mortgage loan”. A loan against property, on the other hand, is a secured loan that you can avail of by pledging your property.
However, our financial situation often hinders the path to achieving them all. You will now receive updates on the new insightful blog, company announcement, product offering, & more. Home Loans are exclusive, which means that a Home Loan can only be used for the purchase or renovation of a house.
Tenure of the loan
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Both the loans have their pros and cons, so let’s see the difference between a Home Loan and a Loan Against Property. Borrowers can avail of aLoan Against Propertyby using their property as collateral. In this case, the borrower must possess landed property, such as a personal house, or commercial properties such as offices or shopping complexes. Compared to a loan against property, a home loan has lower interest rates and the final interest rate offered to you will depend on your credit profile and other factors. Your right to use the facilities is personal to you; therefore, you agree not to resell or make any commercial use of the facilities.
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The main difference between a home loan and loan against property is that a home loan is taken for the property and mortgage loan is taken against the property. The loan is given on the basis of the property value as per the market. You can use the fund for any legitimate purposes be it an emergency or a planned expenditure such as business expansion, marriage, travel or medical purposes. Even though the difference between a home loan and loan against property is visible through their names, many people still get confused between the functioning of these two.
If you have taken a home loan or mortgage loan before, you might not feel the urge to know more details. But, those who do not have the basic understanding of these two loans must read this article. A Loan Against Property is a type of loan that allows borrowers to use the loan amount to meet financial requirements for any life event, to fund a business, for any personal need, or for a medical emergency. In this, a borrower can pledge their existing, self-owned property for an amount that is equal to a specified percentage of the market value of the property owned by them. To meet any financial goal or emergency, individuals prefer to apply for loans. Banks and other financial institutions offer different loan products for different life events.
Interest rate
AHome Loanis an unsecured loan option, usually taken by prospective homebuyers who want to buy a new home, plot, or fund an under-construction property. On the other hand, aLoan Against Propertyis a secured loan type that allows borrowers to meet financial needs for any major life event, fund business or use the loan amount for a medical emergency. As the name suggests, you have to mortgage your property in exchange for the loan amount. The amount approved depends on the value of the property you want to mortgage. Most loans against property offer an option of top-up loan benefits.
You can avail of a home loan for up to years.Loans against property come with a shorter tenure. However, this deduction is available only if you use the funds for your house property repairs.LTVHome loan’s LTV is usually 90% of the property value.The loan against the property’s LTV is up to 60 to 70%. For home loans taken to buy a residential house property, the borrower can claim twin tax benefits under the income tax laws.
A Loan Against Property, on the other hand, is free from end-use restrictions. I hereby authorize Grihashakti and its affiliates to call and/or send an SMS to me in relation to any of their products. Attempt to decipher, decompile, disassemble, or reverse engineer any of the software, comprising or in any way making up a part of the Website or the facilities.
Though these loan offerings are secured, there are a few differences between them. You must identify your needs and choose the one that fits your usage. According to interest rate, loan tenure and EMI, Home Loan will be better if someone interested to take a loan for his/her house. So eventually we can say that the EMI of a home loan is much lower than a loan against property.
Because borrowers can borrow a sizable sum—up to 70% of the value of the property, and have flexibility with payments, as well as the interest rate being lower than that of other loans, it is currently in high demand. In this, a borrower can pledge his existing, self-owned property for a sum of amount that equals a particular percentage of the market price of the property he owns. He must hand over the property documents to the lender until the time he repays the loan and therefore the loan, just like the home loan, is often repaid in EMIs consisting of the principal loan amount taken and therefore the rate of interest. If the borrower defaults on repaying the loan, the lender can sell the pledged property to recover his investment. The lender or bank will give the borrower a loan that is secured by the property.
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