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:
Home loans have comparatively lower interest rates whereas a loan against property comes with higher interest rates.
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.
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 difference between Loan against Property and Home Loan. 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
Notarized letter mentioning address
Insurance policy receipt
Income Proof – Pay slip, IT Returns, Last two years’ balance sheet (self-employed)
Agreement of sale
Land and Building Tax Receipts
Letter of allotment given by builder
Receipts of advance payment towards flat purchase
NOC from builder or society
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!
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