Individuals require loans for various purposes. However, there are so many products in the market that a person can get easily confused. A prime example is a home loan and a loan against property (also known by terms such as a mortgage loan and LAP).
When considering financial solutions, flexibility is key. A Loan Against Property (LAP) offers end-use freedom, letting you fund education, business expansion, or even a dream vacation. With Bajaj Finance, you can enjoy competitive interest rates and tenure options tailored to your needs. Why limit your possibilities? Get a loan against property of up to Rs. 10.50 crore with competitive interest rates and meet your immediate expenses without hassle.
Some often tend to use the same term for these two different products. A home loan is a loan taken to facilitate the purchase or construction of a new home; the property does not already belong to the loan applicant. In contrast, a loan against property is taken by keeping an existing property as security, with the loan being used to fulfill various purposes. Here, we will discuss the differences between these two types of loans.
Home loan vs loan against property
When it comes to secured advances, borrowers often get confused between loan against property and home loan. Both these financing options come with a host of features to cover high-end expenditures. However, some significant factors differentiate them.
Home Loan vs. Loan Against Property
| Home Loan | Loan Against Property | |
|---|---|---|
| Usage | Only for the construction of a house or purchasing a ready-to-move-in property |
Can be used for both business and personal requirements with no end-usage restriction |
| LTV | Up to 90% of a property’s market value |
80% |
| Interest rate | Salaried- 7.49%* to 10.25%* p.a. Self-employed- 7.85%* to 10.65%* p.a. Doctors- 7.60%* to 10.30%* p.a. |
8% to 20% per annum for salaried and professional applicants |
| Processing fees | Up to 4% of the loan amount | Up to 3.54% of the loan amount (inclusive of applicable taxes) |
Considering similarities, both secured loans come with a longer repayment tenor up to 32 years, balance transfer facility, top-up loan, etc. So, apply for one according to your financial requirements.
Considering similarities, both secured loans come with a longer repayment tenure up to 32 years, balance transfer facility, top-up loan, etc. So, apply for one according to your financial requirements. Looking for a solution that provides more funds with fewer restrictions? A loan against property allows you to leverage your property value for various needs. Bajaj Finance ensures a seamless application process with prepayment options and low processing fees. Get loan of up to Rs. 10.50 crore against your property within 72 hours* of the approval.
1. Quantum of loan
Purchasing a house is easily one of the biggest expenses an individual incurs in his lifetime. Real estate is expensive, and much money is required to get your own house. To this effect, home loans grant a higher percentage compared to the property’s value – up to 90%. But, loans against property generally offer up to 80% of the property value.
However, Loan against Property from Bajaj Finserv gives access to a higher loan amount that is enough to take care of the financial needs of most middle-class individuals.
2. Interest rate
The interest rate of the home loan is lower than that of a loan against property. It is because the government and the Reserve Bank of India (RBI) focus on making housing affordable for all, and the result of this is minimizing the margin requirement of a home loan.
3. Loan tenor
The tenure for both home loans and loans against property is significant. Typically, the tenure for home loans lasts for 30 years. A loan against property is also a high-value loan and takes several years to pay back.
Bajaj Finance provides loan against property for tenures up to 15 years. Additionally, you can do a full or part pre-payment at any time with minimal charges. A loan against property offers repayment options that fit your budget, with tenures stretching up to 15 years. Bajaj Finance also provides part-prepayment features, giving you the freedom to reduce your loan burden at your convenience. Leverage your property for a financially secure future. Get a loan of up to Rs. 10.50 crore with the option of interest-only EMIs during the initial tenure.
4. Top-up facility
Most loans against property offer an option of top-up loan benefits. It means that you can get more funding on your existing loan. This feature brings in more flexibility, and you can use the money to serve different financial requirements. Home loans normally don’t come with this facility, though some banks offer them after further assessment.
Additional Read: A step by step guide to apply for a loan against property
Your property is the key to quick financial support! With a Bajaj Finserv Loan Against Property, you can unlock high-value funding at competitive interest rates. Whether it is for medical emergencies, business growth, or personal goals, your property empowers you to access the resources you need with ease. Don’t wait—Get our loan against property of up to Rs. 10.50 crore and turn your asset into a solution!
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