According to me, a loan against property is a better choice compared to a personal loan. Taking out a loan has become a fairly regular occurrence in this rapidly expanding economy. Both personal loans (PL) and loans against property (LAP) have advantages and disadvantages. So, you must know the personal loan vs loan against property difference to decide which is best for your needs.
Loan Against Property vs Personal Loan
As the name implies, a loan secured by collateral is known as LAP. This can use both residential and commercial real estate. Conversely, personal loans (PL) are unsecured loans. You must go through the difference between them from the below table.
Aspects | Personal Loan | LAP | ||
Risk | No risk of asset loss, but lower eligibility because of income dependence. | Risk of losing property if EMIs are not paid. | ||
Approval | Faster approval (24 to 48 hours) with minimal paperwork. | Slower processing (7 to 15 days), as banks verify property documents. | ||
Tenure | Shorter tenure (1 to 5 years), leading to higher EMIs. | Longer tenure (10 to 20 years), making EMIs more affordable. |
I would say choose a personal loan if you need quick funds for short-term expenses like medical emergencies or weddings. However, always choose LAP for larger expenses (business expansion, education, etc.) with lower interest and longer repayment.
This is the difference between personal loan and loan against property.
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Hello. As a banking employee, I can tell you which one you can choose between loans against property (LAP) and personal loans. When you need money, you could think about two popular lending options: personal loans and loans secured by property. The primary difference between the two is that LAP is a secured loan, while personal loans are unsecured. You can make an informed choice by referring to the personal loan vs loan against property difference that I have shared below.
What is the Difference Between Personal Loan and Loan Against Property?
You must know that the basics of financial requirements haven't changed at all over time. They might arise from a variety of circumstances, including weddings, business expansions, child education, etc. Fortunately, you don't need to approach anyone in your family or friends for financial assistance. Instead, you can choose between a personal loan and a loan against property.
But, before that let’s understand about the personal loan and loan against property.
- Personal Loan -
These are unsecured loans, which means that no collateral is needed to be offered in order to obtain the loan.
- Loan Against property -
These are secured loans, meaning the borrower must put up collateral in the form of property, usually a home or a plot of land. Either residential or commercial property may be used for this.
Loan Against Property vs Personal Loan
| Factors | Personal Loan | Loan Against Property |
|---|---|---|
Processing Time |
Faster (2 to 7 days) |
Slow (15 to 30 days) |
Rate of Interest |
High (11% to 24% per annum) |
Low (11% to 16% per annum) |
Loan Tenure |
Short (Up to 5 years) |
Long (Up to 15 years) |
Loan Amount and Disbursal |
Up to 20 lakhs (based on the borrower's ability to repay the loan, credit score, and monthly income) |
Ranges between 40% to 70% of the property value |
Risk |
Risky for lenders |
Less risky |
Processing Fee |
1.5% to 2.5% of the loan amount |
0.5% to 1.5% of the loan amount |
You can choose which is better between LAP vs personal loan for you based on the above table.
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Read more -What is the Difference Between Home Loan vs Loan Against Property?
Which is Better Personal Loan vs Loan Against Property?
Zayant
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2024-05-03T18:01:43+00:00 2024-08-06T15:04:43+00:00Comment
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