Personal Loan Vs Loan Against Property: Which Is Better?

Advantages of getting personal finance

Personal finance is an unsecured credit that you can avail of without pledging any security as collateral. Unlike other loans, a personal or unsecured loan typically has easy-to-meet eligibility conditions. Besides, personal finance offers unrestricted end-use for you to finance your immediate expenses. Here are some of the scenarios where you can use a personal loan:

• Medical expense
• Travel
• Wedding
• Home renovation
• Debt consolidation
• Relocation
• Down payment for a home loan
• Higher studies
• Start a business
• Any other personal need

You can use a personal loan EMI calculator to compute the EMIs that you need to pay towards the principal and interest payable across the loan tenure. Before approaching a lender, you can figure out an EMI size comfortable for you using the calculator. Plan your monthly instalments to conveniently pay off the loan within the loan tenure.

Additional Read – How To Avail Tax Benefits on Personal Loan?

Advantages of getting a loan against property

A loan against property, as the name indicates, offers you funds against the value of your commercial or residential property. Besides competitive loan rates and flexible tenures, you can qualify for tax benefits as well by choosing a loan against property. Similar to personal finance, a loan against property can be used for any end purpose as there is no restriction from the lender on its use.

Here are some uses for loan against property:

• Personal needs
• Investments
• Renovation of property
• Meet working capital needs
• Asset acquisition
• Refinance of self-financed property
• Consolidation of debt
• Mortgage buyout

Difference between loan against property and personal finance

Besides an easy-to-fulfil personal loan eligibility criterion, personal finance has some clear-cut benefits over a loan against property. A loan against property is a secured loan, which means your home is deposited as collateral. Moreover, only the following kind of properties can be considered as collaterals:

• Self-occupied residential property
• Alternate property like residential plots, schools, hospitals, hotels, industrial property,
• Commercial property like offices, shops etc.

Furthermore, if you need instant funds to take care of an immediate expense, it’s prudent to opt for personal finance. That’s because you can avail personal finance instantly. In the case of a loan against property, the lending institution will check your property before approving your loan, and the documentation is heftier when compared to personal finance. On the other hand, you can get personal finance approved within minutes of documents submission.

Besides, with a high CIBIL score and a spotless credit history, you can even qualify for pre-approved personal finance.

Additional Read – Personal Loan or Home Loan Top Up: Which One to Choose?

Over to you

You can use easy personal loan when looking to finance your urgent expenses. If you are searching for a reliable lending institution, choose Tata Capital. Get affordable personal loan interest rates, starting at 10.99% and extended loan tenures of up to 6 years. Apply today!