Home Loans Personal Personal Loans vs Mortgage Loans

Personal Loans vs Mortgage Loans

Personal Loans vs Mortgage Loans

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.

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  1. 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.

  2. The rate of interest in personal loans is higher as compared to the mortgage loans. The reason being in mortgage loans your property is attached as a security while in personal loan there is no security. This may make mortgage more popular than personal but choosing the best is difficult. This is because individuals need and situation varies.

  3. I took out a payday loan in may. I took a new check and 30$ every three weeks to renew. I received my income tax and told them to deposit the check on feb.19 when it was due to pay it off.

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