The only common thing between these two loan types is that there is a home or property involved. Other than that, these two loans are totally opposite to each other. From different loan disbursal criteria to repayment terms and conditions, you might find it difficult to find a match between a home loan and loan against property (commercial or residential).

In this article, we have talked about the unique features of housing loans and loan against property. The purpose is to tell you not to confuse yourself and also that there is also a difference between mortgage loan and loan against property. So, let us begin with the features of each of the loan types and then later on proceed to the general eligibility criteria and documents that you need to submit to the lender. Later in this article, we have given the list of some of the most popular banks and NBFCs where you can get these two loans.

Features of Home Loans

  • It is a secured loan where the property or home works as a collateral to secure the loan.

  • This loan is for the purpose of acquiring a home or a residential property.

  • In case of non-payment or default, the bank can liquidate the property and get back its used loan amount.

  • The home loan interest rates are the lowest of all types of loans with the latest starting rate of 8.45% per annum for women applicants at SBI and 8.50% per annum for others.

  • The repayment period continues up to 30 years and few lenders such as OBC Bank give 40 years tenure.

  • Home loan EMI calculator can be used to check your EMIs.

  • The minimum loan amount is Rs. 1 lakh with maximum up to 90% of the property value.

  • Women borrowers/co-borrowers get special rates

  • Balance transfer to another lender is available

Features of Loan Against Property

  • The loan is given against a property which is held as a security.

  • Loan can be against any property of the loan applicant and not necessarily against a residential property.

  • It can be facilitated by mortgaging any property on the name of the applicant.

  • The amount given as loan can be used for any legitimate, unlike a home loan.

  • The rates are comparatively high as compared to home loans

  • You can repay this loan for the maximum tenure of 30 years.

  • The minimum and maximum loan amount depends on your property value.

Eligibility Criteria for Home Loans

  • Aged between 21-65 years

  • Minimum 2 years of total work experience with regular source of income

  • Co-applicant minimum age limit is 18 years

Eligibility Criteria for Loan Against Property

  • The individual should be a permanent employee with the government or a reputed company.

  • The minimum age to avail loan against property is generally around 24 to 25 yea

  • The applicant can be a professional in any field (doctor, engineer, architect, chartered accountant, etc).

  • The maximum age of the applicant can be 65 years.

  • The individual should be a regular at filing income tax returns.

  • The individual should have been in the same business for a minimum number of years generally between 3 to 5 years.

  • The property in question should be free from legal tangles and should have clear titles registered in the name of the applicant.

Loan EMI Calculator

Be it a home loan or loan against property, you can use a loan EMI calculator to check your monthly installments. These loans may continue up to 30 years, it is suggested to be prepared for the payments. Home loan EMI calculator and loan against property calculators have the same function. The tool takes into account the loan amount, interest and tenure and shows results of the EMI, total interest outgo and total repayment amount.

Published by Zachary McGavin