Loan against property is a loan that is given against the borrower’s property. The property is sold and a settled level of the common market estimation of the property is given to the borrower as an advance. This percentage normally ranges between 60% and 70% of the value of the property. There are many advantages to getting a loan against property.
• The amount of loan available will be much higher when compared to loans such as a Personal Loan.
• The repayment period of the loans is up to 15 years which is much higher than Personal Loans but lower than that of a regular Home Loan.
• The rate of interest is close to regular Home Loan rates.
Loan against property is generally used to raise capital for emergencies and other short-term purposes instead of going for a Personal Loan. There is no prepayment punishment for these credits which is pertinent in the event of the Personal Loans and settled rate Home Loans.
Home Loan is a loan that is given out for purchasing a new property. This could be a plot plus a house or a flat. Home Loans come with long tenures and lower interest rates and are ideal if you want to purchase a home for self-occupation.