Home Loan vs Personal Loan
Individuals approach lenders for a loan depending on their requirements. Home loans, personal loans and vehicle loans are considered to be the most commonly availed loan among many. They tend to be effective when an individual requires funds to complete a particular purchase that may be beyond reach due to various reasons.
Specifically, let us find out the difference between a home loan and a personal loan. Home loans are secured loans that are usually available when someone is looking to buy a house and needs additional funds to complete the purchase. Home loans tend to have a high amount, higher tenure and require collateral.
Personal loans, on the other hand, are unsecured loans and tend to be of a much smaller amount. Personal loans are generally used for short-term requirements, like buying appliances, going on a vacation, renovating the house, buying furniture, etc.
Features of a Home Loan
- Home loans are sanctioned for the specific reason of buying a property or a home. The lender will require documents before approving the loan.
- Home loan amounts can be high depending on the price of the property that one is looking to purchase.
- Home loans usually have a low-interest rate compared to other kinds of loans.
- The tenure of a home loan is high. Most home loans offer tenure of 20 to 30 years.
Features of Personal Loan
- Personal loans are unsecured loans. This means the lender does not ask for any collateral before sanctioning the funds.
- Personal loans are meant for immediate cash requirements for various reasons. Thus, the loan amount is much smaller as compared to a home loan.
- The personal loan tenure ranges from 1 to 5 years
- Personal loans tend to come at a higher interest rate as compared to other loans.
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