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Difference between Home Loan and Loan Against Property

By Finserv MARKETS - Apr 12,2019
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Home Loan Vs Loan Against Property

Terms and jargons related to Home Loans can be confusing, knowing the vast portfolio of loan products which are being offered by financial institutions in the market. For example, many people would get confused between Home Insurance and Home Loan Insurance, sounds similar, right? But are very different from each other. Similarly, Home Loan and Loan against Property have a similarity of words in their product names but are different from one another.

Home loans are taken to buy a house, plot or for construction. Loan against property is a secured used to borrow money from lenders using home as the security. This category of loan is used for renovation, personal expenses, business expansion etc.

Difference between Home Loan and Loan against Property:

Interest rate

Home loans have comparatively lower interest rates whereas a loan against property comes with higher interest rates.

Loan value

Loan against property is offered on upto 60% of the property rate whereas home loan is offered on upto 90% of the property value.


Home loan is offered only for buying or constructing of a house whereas Loan against property can be used for business or personal use but cannot be used for illegal activities.


Home loan repayment tenures can range up to 30 years while Loan against Property is only for 15 years.

Tax Exemption

There is no tax exemption under loan against property but home loan gives you tax benefits up to Rs 1.5 Lakhs under section 80C while repaying the principal amount.


Home loan process, if the documents are in order can be a quick process on Finserv MARKETS. However, Loan against Property requires thorough background checks, therefore, they require more time.

The points mentioned above are enough to clear the doubt between Home Loan and Loan against Property. In a nutshell, buying a home requires Home Loan and mortgaging your home comes under Loan against Property. Once you are eligible for either below mentioned are the documents that you would need to process your loan:

Documents required for Home Loan and Loan against Property:

Identity Proof – PAN Card, Passport, Driving License, Voter’s ID, Employee ID, Bank Passbook and Ration Card

Address Proof – Passport, Utility Bill (telephone, water, electricity, gas) recent bill

  1. Notarized letter mentioning address

  2. Insurance policy receipt

Income Proof – Pay slip, IT Returns, Last two years’ balance sheet (self-employed)

Property documents

  1. Agreement of sale

  2. Land and Building Tax Receipts

  3. Letter of allotment given by builder

  4. Receipts of advance payment towards flat purchase

  5. NOC from builder or society

  6. Estimate of cost of construction

Copies of property to be pledged for the loan (for Loan against Property)

With Finserv MARKETS, applying for a Bajaj Finserv loan against property online is easy, quick and completely hassle-free. What’s more? You can avail a plethora of benefits to get the maximum value of your investment. So why wait? Go ahead and apply for loan against property with us, today!

“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we works towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.”


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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522