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What is the Difference Between Home Loan vs Loan Against Property?

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Banking
0 2023-03-17T10:34:22+00:00
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The only similarity between a home loan and a loan against property is that both are secured loans. However, to understand what is the difference between home loan vs loan against property, one has to first know the meaning of these two loans separately. So let me share here the definitions first and then their differences. Apply for a home loan through NoBroker and get it disbursed quickly Check your home loan EMI using NoBroker Home Loan EMI Calculator   What is meant by a home loan? A home loan is a loan that one takes to buy a ready-to-move-in house, a property under construction or land where the applicant intends to build a house. This is a secured loan and the borrower needs to pay a fixed EMI monthly to pay off the debt.    What is meant by a loan against property? A loan against property is a type of loan where the borrower pledges his existing property for a sum of money. He/she must hand over the property to the lender until the money gets paid fully. The amount can be paid in EMIs as well.   What are the differences between home loans and loans against the property? The differences between home loans and loans against property are-
Home Loan Loan Against Property 
Home loans can be used for constructing a house or purchasing a ready-made house Loan against property can be used for both business and personal needs and has no end-usage restriction 
One can get up to 90% of the property’s market value as a home loan One can get about 60-70% of the property’s market value as a loan against property
The average interest rate in home loan is 8.60% for salaried and professional borrowers  The average interest rate in loan against property is 9.85% for salaried and professional borrowers
Home loans are provided for 20-30 years Loan against property is provided for a maximum period of 15 years
I hope the concept of home loan vs loan against property is totally clear to you now.   Read More: What is the interest rate for loan against property? Which bank is best for loan against property? what is loan against property? How to avail home loan through NoBroker? What is the Difference between Construction Loan vs home loan?
0 2023-04-03T13:06:18+00:00
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Home loans and loans against property are both types of secured loans that are offered by banks and financial institutions. Both these loans are available with all major firms like Shriram City or IIFL Securities. While both types of loans are secured by a property, there are some differences between them. Purpose For the aim of buying or building a residential property, a house loan is obtained. Nonetheless, a loan against property can be used for either personal or business purposes. This covers paying for healthcare costs, business growth, and other expenses. Collateral A home loan is secured against the residential property being purchased or constructed, while a loan against property is secured against an existing residential or commercial property that the borrower owns. Loan Amount The cost of the home purchased or built determines the loan amount. Whereas, the value of the asset used as collateral determines the loan amount for a loan against property. A house loan often has a bigger loan amount than a loan secured by property. Interest Rate Home loans often have interest rates that are lower than loans secured by real estate. This is due to the fact that house loans are thought to be less risky for lenders because the loan's purpose is obvious and the property being bought or built serves as collateral. As loans against property can be accepted for any purpose, they are thought to be riskier. Loan Tenure The tenure of a home loan is usually longer than the tenure of a loan against property. Home loans can have a tenure of up to 30 years, while the tenure for loans against property usually ranges from 5-15 years.

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