Difference between home loan, mortgage loan and loan against property
In this article, we will see the differences between a home
loan, mortgage loan and a loan against property.
Home Loan
● A home loan is approved only if you are taking it for the
construction of your new house or are planning to move into a ready-to-move-in
house.
● The loan plan depends on the market value of the property and
you can avail loan amount of 90% of the property value.
● Compared to other loans, interest rates on home loans are low
and easy to pay.
● The processing fee is less.
● Repayment tenure is for up to 30 years.
Mortgage Loan
● This type of loan can be used for both personal and
professional use by providing a fixed asset such as a residential or commercial
property as collateral to the lender.
● A mortgage loan is the same as a home loan or a loan against
property.
Loan against Property
● this type of loan can be used for both personal requirements
and business needs.
● you can avail such a loan against your residential or
commercial property.
● you can get a up to 70% of the value of the property. However,
your overall eligibility will also depend on your repayment capacity.
● Loan tenure depends on whether you're a salaried employee or a
business owner. It can range from 1 to 15 years.
● A loan against property can only be availed by the person who
owns the pledged property. The property cannot be co-owned or already under
mortgage, or under any legal dispute.
● Most lenders also show a higher preference for newer, sturdy
constructions.
You need to understand your financial requirements in a better
manner and understand the type of loans that you should avail. Hope that helps
you understand the differences.
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