Which is Better – Loan Against Property Vs Personal Loan

It is an obvious fact that financial needs can vary for a human being depending upon the situations in life. At times, the savings made by a person might not be enough to meet a sudden monetary requirement. In times such as these, an individual tries looking for financial help to meet the crisis.

However, with the various forms of loans available in the market, it becomes difficult for an individual to go for one. Though loan against property and personal loans are quite common among the people, there are facts associated with them that one is still unaware of. One needs to have proper knowledge regarding the loans and the ways in which they can be managed well.

Difference between Loan Against Property and Personal loans

Loan against property (LAP) and a personal loan can be two most convenient types of loans that you can take to get some quick cash. However, there are different facts that you need to know regarding them. A detailed comparative study is given below, which will help you to choose the best suitable option easily.

There are some parameters on which both loan against property and personal loans can be compared. The leading parameters are mentioned below:


One of the basic things that a loan seeker must check when choosing a specific loan is the presence of security. When it comes to loan against property, you should be aware that it is a mortgage loan where a certain part of your property is taken as security by the loan lender.

On the other hand, a personal loan is an unsecured loan where the borrower does not need to give any security. As the personal loan is an unsecured loan, the rate of interest over it can be higher compared to the LAP.

Range of interest rates

The general range of the interest rates for the loan against property is 10% to 16%. The same for personal loans can be 12% to 21%. You need to check for the organization that provides any of the two loans at a lower interest rate. A proper search on the internet would surely help you to select an organization from where you can get a loan that caters to your need.


The tenure of the LAP and personal loan are variable. As the capital incurred from the LAP is huge, the tenure for it is also prolonged. You can find LAP plans having the tenure up to 15 years. When it comes to personal loans, the tenure can be up to 5 years. You can always try to use the loan calculator to determine the capital and the interest rate.

Determining factors

When comparing the determining factors for getting the LAP or personal loan, you must be aware of the fact that sanctioning a LAP fully depends on the features of the property that you provide the lender as a mortgage.

The lender checks your credit score and personal income in a year to give a personal loan. You must be aware of the fact that defaulting the monthly repayment for a loan against property can lead you to lose your property. On the other hand, missing the monthly EMIs for a personal loan can result in severe fines and legal proceedings.

When it comes to money, you should be sure about getting decent amounts in case of loan against property. If you want flexibility in case of the capital amount, the personal loan rates plan can be the best. Lastly, an individual needs to go through all the terms associated with Loan against property and personal loan, figure their demands and then settle for one.

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