There are two types of secured loans available in the market and each one has its own benefits so before you apply for either you must be aware of the difference and the benefits each one has to offer.
Property Loan vs Home Loan
A property loan is a secured loan that allows borrowers to obtain a substantial amount of funding to cover any large-ticket expense. To obtain the necessary funds, a borrower can use their existing commercial or residential property as collateral with a lender such as a bank or NBFC. A loan against property has slightly lower interest rates than other types of unsecured loans, but is slightly higher than a home loan.
The main distinction between a property loan and a home loan is that the funds you receive do not have any end use restrictions, which means you can use the money to cover any expense, such as a property purchase, property renovation, debt consolidation, wedding expenses, or even medical expenses.
A home loan is one of the most popular ways to get money to buy or build your dream home, and while the cost of such a purchase is high, there are numerous lenders available in the market that offer home loans to qualified candidates at an attractive rate of interest. The property you want to buy will be pledged with the lender for the duration of the loan, and once the loan is repaid in full, ownership of the property is returned to the owner.
Although there are numerous advantages to obtaining a home loan, one of the most notable features is that the funds are subject to use restrictions, which means that the funds can only be used for the purchase or construction of a residential or commercial property.
A home loan is also widely regarded for the tax benefits that can be obtained; however, a loan against property does not provide many tax benefits, and the eligible tax deductions are dependent on how the funds are used. Home loans are eligible for tax breaks under Section 24 on interest paid and Section 80C on principal amount.
.png)
0 Comments