Loan Against Property vs Personal Loan

Loan Against Property vs Personal Loan

LOAN AGAINST PROPERTY	PERSONAL LOAN
Loan against property is granted by mortgaging property	Personal loan is granted based on individual’s integrity and ability to pay without any guarantor or security
Interest rates are low ranging from 12% – 16%	Personal loan carries a higher rate of interest compared to LAP which ranges from 16% – 21%
Since the rate of interest is low the maximum tenure for LAP is up to 15 years (180 months)	Since the rate of interest is high, the maximum tenure for LAP is up to 5 years (60 months)
The loan is given as a certain percentage of the property’s market value, usually around 40% – 60% which may lead to loss of property incase an individual is not able to repay the loan back	Maximum loan eligibility is determined primarily by an individual’s income and there is no property mortgage.
It is a secured loan.	It is an unsecured loan.