Life is the name of unexpected surprises. They can be good or bad. So you must prepare yourself for any situation. If you are having any money crises be it a medical emergency or wedding expense, you can take a financial help. There are different types of loans available in the market including personal loans, home loans, loan against property, car loans, etc. To cope up with financial crises, you should only consider two options personal loan or loan against property. Here is a detailed comparison between a personal loan and loan against property:

Define personal loan? A personal loan is an unsecured loan and a salary based product. It does not require any collateral. You can apply for a personal loan if you need finance for any medical emergency, a vacation trip, marriage expenses, etc.

Define loan against property? Loan against property is a secured loan and can be taken against the residential property or commercial property.

Compare personal loan and loan against property and choose your option:


Personal loan or loan against property


Interest Rates: The first and an important factor is the rate of interest. The interest rates for a loan against property are 10.50% to 12% per annum. As it is a secured product, so rates are lower as compared to personal loans. Personal loan interest rates are from 11.49% to 40% per annum. So, if you are looking for a cheaper loan then go for a loan against property.

Credit Score: If your CIBIL score is poor, you should consider loan against property. In the case of a default, banks can take over the pledged property. A personal loan is only for good credit score holders. If you have a credit score more than 750, only then you can take a personal loan.

Processing Time: If you need instant money, always take a personal loan. The processing time of a personal loan is 2 to 3 days. Banks will verify your credit history, employment details, and personal details. But a loan against property can take more than 2 weeks to get disbursed. Banks will do the verification of your property papers and other details. It will take time for the processing. So, if you can’t wait for so long, you should go for a personal loan.

Loan Tenure: The tenure of personal loans is from 1 to 5 years whereas the tenure of a loan against property is maximum 15 years.

Loan Amount: In the case of a personal loan, the loan amount will purely depend up on your salary. The maximum amount that you can get is Rs. 20 lakh. Loan against property will consider the value of the property in the market. You can get loan amount 40 to 70% of the value of the property. If you need high amount, then choose loan against property. But, always analyze your repayment capacity before taking a loan.

So, these points clear the difference between a personal loan and loan against property.  Personal loans are better if you are having a healthy and strong banking history and need an instant finance. But if you are looking for cheaper interest rates and can wait for 1 to 2 weeks then you should choose loan against property. Now, the choice is all yours.