Personal Loan or Loan Against Property

Personal loans are often referred to as all-purpose loans. They come in handy for sudden expenses for which you may not have ready cash.

If you can spend a little more time in processing and documentation, a cheaper loan than personal loan is a loan against property (LAP). LAP is a personal loan given by mortgaging your house property. The loan is given as a certain percentage of the property’s market value, usually around 40%-60%. LAP interest rates are cheaper by 3% to 4% compared to personal loan rates.

Personal loan Loan against Property (LAP)
An individual can take a personal loan for personal usage without any security or guarantor The individual takes the loan by mortgaging the house property.
Higher interest rates compared to LAP One of the cheapest retail loans after home loans.
Maximum loan eligibility is determined primarily by an individual’s income. Maximum loan eligibility is determined primarily by the value of the property and income.
Maximum loan tenure for personal loan is up to 5 years (60 months) Maximum loan tenure for LAP is up to 10 years (120 months)
Unsecured loan Secured loan

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