Home Loan or Loan against Property? Picking the better investment

A home loan is a loan that is advanced to you by a lender to assist you in buying a house. This amount needs to be repaid to your lender in monthly instalments.

If you apply for loan against property, you will receive a loan against the mortgage of your property. This means that your property is your security in the event that you are unable to pay back the loan. This loan is usually between 40% to 60% of your property’s value, and can sometimes go up to 70%. You can take a Property Loan with benefits like EMI-free months and Zero-Penalty Foreclosures.

What’s great About These Loans?
Home loan:

1. Your capital goes up: Property prices in India have been skyrocketing over the past decade. Buying a home is the best investment you can make to tackle inflation, and ensure that you have a large reserve of funds in the future.
2. Easy interest rates: Home loan interest rate is much lower than most loans – anywhere between 9.50% to 13%. This makes repaying a home loan cheap and easy on your finances. To apply for home loan at lowest interest rate, and you can avail of rates that go as low as 9.75.
3. Renting vs. Buying: Buying a house is expensive, but can prove to be profitable in the long run. Buying a house means paying EMIs every month, but with the surge in property values, you’ll have a valuable asset by the end of your loan tenure. If you rent a house, the increasing real estate prices will result in an increase in your monthly rental payments.

Home loans are also quickly processed and disbursed, so you won’t have to deal with delays when you apply for this type of loan. You can apply online for home loan at Bajaj Finserv, or you can transfer your existing Home Loan!

Loan against Property:

1. It’s your property: When you apply for loan against property, you still maintain ownership of your property. This means that you continue to live in your own home and make monthly loan payments to retain your ownership.

You can sell it if you want to: If you’re unable to make monthly payments or feel like you won’t be able to in the future, you could sell your property. Since the loan is only a percentage of your property’s value, you can repay the loan and be left with surplus funds.

Plot loan interest rates:

The tenure for a property loan can be anywhere between 1 – 15 years. The average rate of interest lies between 12% and 17%. The combination of these factors ensures that property loans are easily repayable.

You can make more money:

If you’re a businessman who has taken a plot loan in India, you can expand your business using your property. With rising property prices, you can refinance your property at a higher value, which will grant you an increase in your loan amount. Using the additional funds, you can work towards business expansion.

Both types of loans have benefits that make them ideal for different situations. If you’re looking to buy a house, availing a home loan would be the best option because it’s the reason that home loans are provided. If you’re in need of quick funds, taking a loan against property is a good option. You can pledge your property as collateral and use the funds for any activity you desire; the lender cannot question what you spend the money on.

It’s not hard to decide which of these loans to choose, because both these loans are utilised for completely different purposes.

Source: https://loanagainstproperty.quora.com/Home-Loan-or-Loan-against-Property-Picking-the-better-investment-1