Difference between home loan, mortgage loan and loan against property

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.

Originally published at https://findifsccodeforbank.blogspot.com.