Mortgage loans and personal loans
The following article can help you to identify the simple difference between mortgage loans and personal loans. Even though personal law looks very attractive there are some drawbacks for the personal loan like high interest rates.
Down payment of your home loan
Sometimes you need money for initial down payment of your home loan. An attractive option may be personal loan which you can get in a matter of two to three days. Even though it is attractive the interest rates for the personal loans are very high compared to other types of loans.
Personal Loans vs Mortgage Loans
One of the best option
One of the best option is to go for a loan against property where you need not have to sell your property but can simply Mortage the property to raise this money. In India banks issue loans against property for the properties which are located in urban or semi-urban areas only. If you have a house in some remote village or some commercial space, it may not be acceptable to the bank. Usually residential properties are attached to Mortage loans. The policies of different banks may vary.
In the case of personal loan it is given without any security. Whereas in the case of Mortage loans your property is attached to the loan. This is a security for the banks.
Why are these mortgage loans cheaper than personal loans?
There are many reasons for this, one of the main factor that makes this loan cheaper is that the lender has a security in the form of property. The personal loans on the other hand is given without any sort of security.
Recommended Read :
- Loan Against Property Risks Involved
- What is a Personal Loan?
- How to Get Personal Loan?
- Personal Loan for Women Employees
- What is Personal Loan Eligibility and Benefits?
- Facts to Know Before Applying for Personal Loan
- Beware of Personal Loan Frauds
- Gold Loan vs Personal Loan
- What is Unsecured Personal Loan?
- How to Get Loan Against Insurance?
- How to Get Unsecured Personal Loans?
- Secured Loan vs Unsecured Loan
- Pros and Cons of Financing Business With Personal Loan
- Risks and Benefits of Combining Personal Loans
- Pros and Cons of Prepayment and Part Payment of Personal Loan
- Loan Against Car
- Who are Private Lenders?
- Processing Fee for Loans
To put simply, personal loan means borrowing money without keeping anything as a collateral. While, a mortgage loan is where one borrows money by keeping something as a security i.e. a piece of property. Personal loans carry a higher rate of interest as compared to mortgage loans. People have different reasons for choosing between the two.