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Home Loans vs Loans Against Property: Know the Differences?

Home Loans vs Loans Against Property: Know the Differences?

Home loan and Loan Against Property is a brain-fogging classic part of Indian culture.

The Indian home loan and Loan Against Property has not been able to work in its full essence.

There is still much to be thought about what can be done to make the Home loan and Loan Against Property work better.

You may often face a financial crunch. In such situations, taking a loan can help you out.

However, what type of loan should you take?

There are innumerable options in the market. It is quite natural to get confused.

Home loans and loans against property are the two loan types that people tend to confuse the most.

Are you also one of them?

Well, there is no reason to worry. We will walk you through the main differences between the two.

What Is A Home Loan?

A home loan is a loan provided by a financial institution to an individual or business for the purposes of buying, constructing, improving, or renting a property.

The agency providing the loan may offer either a fixed rate or a floating rate based on a number of factors including the borrower’s credit score and income.

You can apply for home loan online for new house, the lender will keep the house as collateral.

You will get full ownership only on repaying the loan.

This page provides an overview of home loans and includes a comparison of the commonly available home loan rates offered by various lenders throughout the India.

What Is A Loan Against Property?

Loan against property is available against those property you already own. You can keep it as collateral with your lender. They will seize the property if you fail to repay the loan.

Loan Against Property is great option for those who need a home loan with very good rates, but have bad credit.

Generally, in order to qualify for home equity loan, you must have owned your property for at least one year and the bank or lending institution will consider an appraised value of your home [at least 20% more than the amount of the loan].

It is usually called Loan against Property, because it involves a real estate property.

This kind of loan is a good choice for people who have low credit scores. If you think that the loan will enable you to regain your financial freedom, then, this may be one option available for you.

So many people are opting for this as their financing option these days.”

4 Differences Between Home Loans and Loans Against Property

There are several differences between home loans and loans against property.

One major difference is that a home loan is an easy to obtain loan because you can buy the house with the loan itself, whereas a loan against property has to be cash financed by another source to purchase the asset that secures your debt.

1. Loan Amount:
Building your dream house can cost a lifetime of your savings. It involves huge expenses. That is why, a home loan gives you a higher amount. Most lenders grant you around 90% of the value of the house. However, loans against property can give up to 70%of the property value.

2. Rates of Interest:
The government wishes to make housing affordable for all. That is why, home loan interest rates are lower than the average property mortgage loan.

3. Loan Tenure:
Both of these loans have a long tenure. Home loans come with a tenure of up to 20 years. Loans against property also have a tenure of up to 15 years. So, your financial burden will spread out for both of these loans. Moreover, when you take loans against property from PNB Housing, you can get flexible tenures.

4. Loan Top Ups:
What if you require more money in the middle of your loan tenure? Well, you can go for a top-up loan. It allows you to get more funds on your existing loans. You can use this extra money for several purposes. This facility comes with loans against property. However, you will not get it on home loans.

Guess what is the best part of lap loans?

You can even use it to purchase a new house. However, you cannot use your home loans for any other purpose. Do not forget to check the home loan against property interest rates before applying.

Going for a loan against property or deal with loan against property in India gives you many great benefits to avail.

This is such a proof that you have a good cash flow and the reason behind it is that your assets are much more than your liabilities.

Final Word

PNB Housing offers you loans against property at competitive rates. They make sure your loan is pocket-friendly.

Home loan and Loan Against Property are very important to any individual.

Home loans and Loan Against Property serves the purpose of funding an asset owned by an individual.

Moreover, you can get approval within a couple of days. That too with minimum paperwork. So, do not wait further.

Check your eligibility now and apply for a loan to meet your needs.

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