If you can spend a little more time in processing and documentation, a cheaper loan than Personal Loan (PL) is a Loan against Property (LAP). LAP is a personal loan given by mortgaging your house property. The loan is given as a certain percentage of the property’s market value, usually around 40-60 per cent. LAP interest rates are cheaper by 3- 4 per cent compared to personal loan rates.
Loan against Property
- The individual takes the loan by mortgaging the house property.
- One of the cheapest retail loans after home loans.
- Maximum loan eligibility is determined primarily by the value of the property and income.
- Maximum loan tenure for LAP is up to 15 years (180 months)
- Secured loan
- An individual can take a personal loan for personal usage without any security or guarantor
- Higher interest rates compared to LAP
- Maximum loan eligibility is determined primarily by an individual’s income.
- Maximum loan tenure for personal loan is up to 5 years (60 months)
- Unsecured loan