As we know market offers a wide variety of loans to borrowers to meet their financial requirements like home loan, car loan, loan against property, education loan etc. But many borrowers confuse these different types of loans to be similar. Let us take an example of loan against property, home loan and a personal loan. Despite being these loans different from one another, most of the borrowers believe them to be the same. So, lets have a quick look at the three types of loan and their comparative difference.
Personal loan is an unsecured loan, apply personal loan to meet personal expenses like medical expenses, marriage expenses, travel etc. A loan against property (LAP) is a secured loan. It is a type of personal loan which is borrowed against an owned property. Home loan is also a secured loan which is borrowed for the purpose of purchasing a new home, plot etc. In case of personal loan, it is an unsecured loan, loan amount depends upon the income of the borrower. Whereas in LAP and home loan it depends upon the value of the property and income. Interest rate charged on personal loan is usually high in comparison to home loan and LAP because of the former being an unsecured loan. Repayment tenure for personal loan, LAP and home loan is up to 5 years, 15 years and 30 years respectively. Loan disbursal is quick and with less paperwork in case of personal loan in comparison to LAP and home loan. Hence, one should not confuse these different loans to be same. First understand their key differences and features and then accordingly select the loan matching your requirements.
Personal loan is an unsecured loan, apply personal loan to meet personal expenses like medical expenses, marriage expenses, travel etc. A loan against property (LAP) is a secured loan. It is a type of personal loan which is borrowed against an owned property. Home loan is also a secured loan which is borrowed for the purpose of purchasing a new home, plot etc. In case of personal loan, it is an unsecured loan, loan amount depends upon the income of the borrower. Whereas in LAP and home loan it depends upon the value of the property and income. Interest rate charged on personal loan is usually high in comparison to home loan and LAP because of the former being an unsecured loan. Repayment tenure for personal loan, LAP and home loan is up to 5 years, 15 years and 30 years respectively. Loan disbursal is quick and with less paperwork in case of personal loan in comparison to LAP and home loan. Hence, one should not confuse these different loans to be same. First understand their key differences and features and then accordingly select the loan matching your requirements.
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