Difference Between Loan Against Property and Home Loan, Online Comparison
Loan against property (LAP) and home loans are both types of secured loans that allow borrowers to borrow money against the value of their property. However, there are some key differences between the two. Here is an online comparison of loans against property and home loans:
Purpose: Home loans are taken out to purchase a new residential property or to construct a new home. LAP, on the other hand, can be taken out for any purpose, including business expansion, debt consolidation, education, medical emergencies, or personal use.
Loan amount: Home loans typically have higher loan amounts than LAP as they are meant to cover the cost of the property being purchased or constructed. The loan amount for home loans can range from a few lakhs to several crores, while LAP loan amounts are typically lower.
Interest rates: Home loans generally have lower interest rates than LAP due to the lower risk involved. Home loan interest rates can be fixed or floating, while LAP interest rates are typically higher and fixed.
Tenure: Home loans typically have longer tenures than LAP. The tenure for home loans can range from 10 to 30 years, while the tenure for LAP is usually shorter, ranging from 5 to 20 years.
Processing time: The processing time for home loans is usually longer than LAP due to the larger loan amounts involved and the requirement for property valuation. The processing time for home loans can take several weeks, while LAP processing can be faster.
Eligibility criteria: The eligibility criteria for home loans and LAP are similar, including factors such as income, credit score, property value, and age of the borrower.
In summary, home loans are typically taken out to purchase or construct a new home, while LAP can be taken out for any purpose. Home loans have higher loan amounts, lower interest rates, and longer tenures than LAP, while LAP processing is usually faster. It’s important to carefully consider your financial needs and repayment capacity before choosing between a home loan and LAP.
Home loans and Loans against Property (LAP) are two types of secured loans that allow borrowers to borrow money against the value of their property. Home loans typically have higher loan amounts than LAP, while LAP loan amounts are typically lower. On average, there is a processing time of 5-20 years, which is shorter for LAP due to larger loan amounts and the requirement for property valuation. Eligibility criteria are similar, including factors such as income, credit score, property value, and age of the borrower.