Deciding between a Mortgage Loan (Loan Against Property) and a Personal Loan can be a little troubling, but it is extremely important to know the difference. Mortgage Loan uses your property as a promise to pay back the loan, giving you more money for a longer time, which is good for big plans. Personal Loans are faster and don't need anything to promise, but you get less money for a shorter time, good for quick needs. This guide will make it easier for you to understand Loan Against Property and Personal Loan, so that you can choose the best one with the help of Bajaj Finance.

What is a Mortgage Loan?

 Mortgage loan i.e. Loan Against Property, is the one where you borrow money using your house or any property as a collateral. Hence, it is called Loan Against Property. It's a good option when you are planning to take financial help for big things like starting a business.
● Features & Benefits of a Mortgage Loan:
● Amount: You can borrow amount up to ₹10.50 crore.
● Tenure: You have up to 15 years for repayment.
● Interest rate: You can get loan interest rates starting from 8% p.a.

What is a Personal Loan?

A mortgage loan i.e. Loan Against Property, is the one where you borrow money using your house or any property as a collateral. Hence, it is called Loan Against Property. It's a good option when you are planning to take financial help for big things like starting a business.

● Features & Benefits of a Mortgage Loan:
● Amount: You can borrow amount up to ₹10.50 crore.
● Tenure: You have up to 15 years for repayment.
● Interest rate: You can get loan interest rates starting from 8% p.a.

Understanding Interest rate of Mortgage Loan and Personal Loan

Interest rate on a loan is the amount charged by a NBFC or Bank or any lending institution for borrowing money, expressed as a percentage of the loan amount. It reflects the cost of borrowing the money. Mortgage loans attract less interest rates starting from 8.00%, as they are secured by a collateral to cover the loan amount. Hence, it attracts low interest rates with high repayment tenure.

On the other hand, Personal Loan attracts a mortgage loan interest rate starting from of 11% and requires credit score check before lending the loan amount. But the process for personal loan is quick and can become a lifesaver in the times of urgent financial requirement.

Advantage and Disadvantage

Mortgage Loan and Personal Loan have their own advantages and disadvantages. One should consider their needs while choosing the type of loan.

                    Mortgage Loan          Personal Loan
Advantage
  • Get more money.
  • More time for repayment.
  • No collateral needed.
  • Quick to start.
Disadvantage
  • Need property as collateral.
  • Takes more time to complete the process.
  • More interest rate.
  • Less money to borrow.
  • Less duration for  repayment.

When to Choose a Mortgage Loan?

Pick a mortgage loan when you need a big amount of money and have an available property that you can keep as collateral against the loan amount. Choosing a Mortgage Loan is ideal when you are either planning to start/grow your business or planning to clear your debts. It is also an ideal loan if you are planning to buy a house with strategy to mortgage your existing property which can either be a commercial or residential.One can calculate the interest rate on their mortgage loan using online EMI Calculator by Bajaj Finance.

Eligibility, Documents and Applying for a Mortgage Loan with Bajaj Finance

It's simple to apply for a mortgage loan with Bajaj Finance. To apply, you need to check your eligibility and keep some documents handy and simply follow the points listed below:

Eligibility:

● Age: Must be between the age group of 25 to 85 years.
● Nationality: Must be a citizen of India.
● CIBIL score: A CIBIL Score of 700+ is ideal.
● Occupation: Salaried, self-employed professional like doctors, and self-employed non-professionals.

Steps to Apply:

Step 01: You can visit the official website of Bajaj Finserv and click on “Apply” button.
Step 02: Enter your pin code and provide your basic details.
Step 03: Select the loan type and proceed with the application.
Step 04: Generate and submit the OTP to verify your phone number.
Step 05: Enter your property details and click on “Submit”.

Documents Required:

● Proof of identity/address – Aadhaar/passport/voter’s ID/driving license, etc.
● Proof of income.
● Property documents.
● Proof of business (for self-employed).
● Bank account statement of last 6 months.

Choose between a mortgage loan and a personal loan based on your needs and cover your financial urgency. For big things you need a bigger amount and long time to pay, so a mortgage loan is best. For small things, you need quick approvals and disbursal, so a personal loan is better. With help from Bajaj Finance, picking the right loan is easy.