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Personal loan (PL) vs. loan against property (LAP) – Choose wisely

Usually, this readiness hinges on your cash or funding situation. If you are cash-rich, you'll be able to appropriately deal with short notice opportunities and threats. If not, then you must consider either a loan against property or a personal loan, since both have their advantages and disadvantages. Are you wondering which one could be the right option for you? Letu2019s look at both in detail.

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Personal loan (PL) vs. loan against property (LAP) – Choose wisely

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  1. Personal loan (PL) vs. loan against property (LAP) – Choose wisely

  2. Understanding PL and LAP • PL is an unsecured form of financing. • LAP is a secured loan backed by real estate assets.

  3. Benefits of LAP • High loan amount. • Repayment tenure up to 15 years. • Due to high-worth collateral, interest rate is low. • Can be used for various purposes.

  4. Drawbacks of LAP • In case of default, you may lose your property. • No tax benefits. • Approval process is lengthy.

  5. Benefits of PL • You do not need to offer any collateral. • Minimal documentation required. • Can be used to repay high-interest loans. • Can be used for several purposes.

  6. Drawbacks of PL • Being unsecured, it has a high interest rate. • If not used wisely, it can create unnecessary debt burden. • Short tenure, up to 60 months.

  7. Which is better – LAP or PL?

  8. Processing time • PL is approved quickly, while LAP approval takes time.

  9. Interest rate • LAP interest rate is lower than PL.

  10. Loan amount and tenure • LAP offers a higher loan amount than PL. • LAP offers a maximum repayment tenure of 15 years, while PL’s maximum tenure is 60 months.

  11. Documentation • Compared to LAP, documentation process for PL is simple.

  12. Both LAP and PL have their own benefits and drawbacks. Compare them thoroughly before taking a decision.

  13. Thank You !Would Love to Hear From You Hero FinCorp Limited 09, BasantLok, Vasant Vihar, New Delhi - 110057 Tel. 18001024145 Email Id: Corporate.Care@HeroFinCorp.com Website: https://www.herofincorp.com/ Know more: Loan Against Property vs. Personal Loan

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