Home Loan vs Mortgage Loan-Banner_WC
Home Loan vs. Mortgage Loan: What is the Difference?_WC
There are several different types of secured property loans in the market, and quite often, it may get confusing to pick the differences apart in each of them. For the sake of clarity, it must be made clear that even Home Loans are a type of mortgage loan; wherein the property you seek a loan is considered a collateral for the sanction. However, through this article, we establish the differences between Home Loans and Loans Against Property – which are commonly referred to as mortgage loans.
The purpose of demarcating the difference is to help borrowers make informed decisions about which loan type is correctly suited to their needs – helping them choose, and then proceed to apply for the right loan, knowing everything it entails.
Bajaj Housing Finance offers both loan types to interested applicants, depending on what their financial need is. Here are the differences between both products that we offer:
|Parameter||Bajaj Housing Finance Home Loan||Bajaj Housing Finance Loan Against Property|
|Purpose||To help in home buying or renovation only||To help address any financial expense, with no end-use restrictions|
|Interest Rate||8.30%* p.a.||9.50%* p.a.|
|Loan Sanction||Rs.5 Crore* or higher, basis eligibility||9.50%* p.a.|
|Tenor||Up to 30 years||Up to 18 years|
|Disbursement Time||In 48 Hours* from the time of formal loan approval||In 72 hours* from the time of formal loan approval|
|Part-Prepayment Charges/Foreclosure Charges||No additional charges on part-prepayment or foreclosure for individual borrowers with a floating interest rate Home Loan||No additional charges on part-prepayment or foreclosure for individual borrowers with a floating interest rate Loan Against Property; not applicable for entities who borrow for business expansion|
|Loan-to-Value Ratio||May go up to 75% to 90% of the property’s value||May go up to 70%* to 75%* of the property’s value|
|Eligibility Criteria||Easy-to-meet and basic; open to salaried, professional, and self-employed applicants||Easy-to-meet and basic; open to salaried, professional, and self-employed applicants|
For a more detailed insight into the fees and interest rates attached to both loan types, click here.
Your choice of loan has to depend entirely on what you need the funding for – if it is to buy a house, or renovate the one you live in, then a Home Loan is ideal for you, given its low interest rate and sizeable loan sanctions. On the other hand, if you find yourself short of cash, and need funds immediately to take care of your pending bills, a Loan Against Property is what you need.
It is not apt to compare both loan types as they are both meant to serve different purposes, and both have their undeniable salient features. Whatever be your need, borrow from Bajaj Housing Finance to cover your expenses.
*Terms and conditions apply