How is a Loan Against Property Different from a Home Loan?

Secured loans have been very popular for decades because of the lower interest rates they offer to borrowers. Thereby making home loans and loan against property the best choices. Also, a longer tenure of repayment feature on both is the cherry on top. Both financial and mental relaxation are a privilege when you go for a secured loan. While both home loans and loans against property sound quite similar, there is a significant difference you must know before proceeding with it.

This blog gives you a brief explanation of how a home loan and loan against property are different from each other.

Distinguishing Between Home Loan and Loan Against Property

Parameters	Home Loan	Loan Against Property
Definition	A home loan is taken for buying a constructed and ready-to-move-in property or a property that is under construction.	A Loan Against Property means a loan that is taken against the property you already own.
Collateral Security	The property you are buying with the loan is secured against the loan.	Secured against the property you own.
Use	For buying a new home, renovating and modifying your existing home.	For personal or business purposes.
Tax Benefits	Principal and interest are eligible for tax benefits.	Interest is eligible for tax benefit when the loan is used for business purposes
Interest Rate Comparison	Lower interest rate than loan against property. You can get a home loan in India with an interest rate of 8.71% to 9.1% per annum.	Higher interest rate as compared to home loan, usually 9.50% to 13.30% per annum.
Repayment Tenure	You can typically get a Home Loan for up to 5 to 30 years, with the most common being 30 years.	You can typically get a Loan Against Property for up to 5 to 30 years, with most lenders offering between 10 and 20 years.
Documentation	Basic documentation for your KYC is required, such as identity proof, income proof, bank statement and property details.  The property papers are secured with the bank until you repay the loan completely.	Basic documents like identity proof, income proof bank statements and property papers will be required. The mortgage will be created by the bank on the collateral property.

Both of these loans are quite affordable as compared to unsecured loans. When you are looking to buy a house, you can go for a home loan. Accordingly, when you are looking for a loan with low interest rates, a loan against property is a secured loan you can opt for.

Lenditt offers affordable online home loans and loans against property that support the dream of owning a home by millions of Indians. Competitive interest rates, transparent loan agreements and a swift loan application process are all you need in the fast-moving world. Lenditt is a platform that understands your convenience and values your time as well.

Choose Lenditt. Choose the Future of Loans.