Also Read: Beginner’s Guide For Taking A Loan Against Property
Key differences between PL and LAP
Getting a loan against property is generally a slower process than a personal loan, as it has the additional steps associated with the legal and technical assessment of the land or house that is considered as the collateral.
Since personal loans are unsecured, they attract a higher interest rate. However, if you are planning to take one, a personal loan calculator can quickly give you an estimate of what you will pay as interest. The loan against property interest rate is generally lower due to the collateral’s presence.
Since the loan against property amount is proportional to the value of the asset being pledged, it is considered a secured loan, and hence,a higher loan amount is usually disbursed. Also, the payment tenure is longer than in PL, and can last as long as fifteen years.
Looking into Hero FinCorp personal loan details can give you an idea about how much loan you can get along with the repayment terms.
While monthly income is considered as a factor for approving a personal loan, a LAP applicant is judged based on their repayment ability and property value, while also taking into account the age and profitability of the business to be funded.
Also Read: Benefits of taking a Loan Against Property
Documentation necessary for applying
The following documents are commonly required for both LAP and PL. LAP, however, also requires the applicant to submit their property papers for evaluation by the lender.
Also Read: Instant personal loan is the best option for emergency fund requirements
So, which loan wins?
You should choose the loan based on your requirements and status. However, note that before you get a LAP, you need to be sure that you can pay it off on time, as you stand to lose your mortgaged property otherwise. Even though a personal loan gets processed faster, these days, leading financial institutions are speeding up the process of LAP disbursal as well.
Also, note that loan against property especially makes sense for self-employed professionals and business owners, who might have a long-term goal in mind. In addition, personal loans are a good bet if you have no asset to hypothecate or have a decent credit score, which can lower the interest rate charged. So, assess your situation, needs thoroughly, and then choose a loan that is most suitable.
Hero Fincorp offers a wide range of financial products including Personal Loans for personal needs, Business Loans to support business growth, Used Car Loans for purchasing pre-owned vehicles, Two-Wheeler Loans for bike financing, and Loan Against Property for leveraging real estate assets. We provide tailored solutions with quick processing, minimal paperwork, and flexible repayment options for smooth and convenient borrowing experience.