A personal loan is a loan from banks or Loan Providers in Delhi. It can be used to pay for personal expenses such as education, vacation, or medical expenses. You will have to make monthly payments on the loan until it’s repaid by either making additional payments or paying off the entire amount at once.
A mortgage loan is a loan from a bank or financial institution to purchase a property, such as an apartment building or house, which gives you complete ownership over it (the property). The lender provides the money based on how much equity they believe your property has based on its current market value and other factors such as location and condition, etcetera. Hence, there are no surprises when repayment time comes around!
Comparison Between Personal Loan Vs Mortgage Loan
There are many differences between a personal loan and a property mortgage loan. The main difference is their cost. A personal loan has a higher interest rate than a mortgage loan, meaning you will have to pay more in the long run.
A mortgage also has fixed interest rates, while personal loans do not have any fixed term; therefore, these terms are very different!
- Collateral Factor
The collateral factor is a major deciding factor in selecting a mortgage or loan. This refers to the property or other tangible assets used as security against your loan amount. In default, the lender can take possession of this asset and sell it at auction.
In the case of personal loans, like home loans and credit card debts, you don’t need any collateral because these do not involve any physical property; however, there are some situations where you may have to provide collateral against your personal loans
- Time Factor
You can take out a mortgage loan for up to 30 years from good Loan Providers in Delhi. On the other hand, you can only get a personal loan for 18 months. So if you want to buy something expensive that would require long-term financing, then mortgage loans are your best bet.
Suppose your credit score is reasonable enough. Interest rate is a percentage of the loan you pay to borrow money. This is usually expressed as an annual percentage rate (APR) or effective annual rate (EAR)., and there are no other issues with the application process (like past delinquencies). In that case, getting a mortgage will be more beneficial than taking out another type of short-term unsecured debt like an unsecured personal line of credit or cash advance from your bank account.
- Amount Factor
The amount of your personal loan and mortgage loan will be different. A mortgage loan is usually more than a personal one, but it depends on what type of house you want to buy and how much money you have saved.
Mortgage loans are available in five main repayment periods: monthly instalment (payments at the end of every month), quarterly instalment (payments made every three months), semi-annual instalment (payments made every six months), annual instalment (a single payment that lasts for 12 months) or bi-annual instalment (two payments made at least two times per year).
Now that you know the differences between a personal loan and a property mortgage loan, you can choose the one that suits your needs from Finway FSC. A personal loan is designed for short-term use, while a mortgage loan is meant to be used as an investment. Both have advantages and disadvantages, but it ultimately comes down to what type of financial situation will work best for each individual.