An individual can require an advance to fulfil various requirements. Depending on the needs of borrowers, financial institutions offer various types of loans, each with their own set of benefits.
Among these financial products, loan against property
and home loans are two of the most availed ones. But while home loan can be availed only to purchase a house or a property, a loan against property can be utilised to cover various financial needs.
Advantages of property loan over home loan –
Unlike other secured advances such as home loans, loan against property has no end-use restrictions and can be utilised to fulfil any financial requirement ranging from medical emergencies to higher education expenses, travel costs and any other miscellaneous charges.
With home loans, the credits are transferred directly to the account to property owners and, thus, can be utilised only in purchasing the property. However, the loan against property process requires the amount to be transferred to the borrower’s account for him or her to use it according to their needs.
Compared to home loans, the documentation process to avail loan against property is much easier. Availing home loans can require extensive documentation including that of legal verifications of the concerned property purchase. Loan against property, on the other hand, requires individuals to submit only a few basic documents.
Thus, for individuals looking to avail an advance to fulfil financial needs other than purchasing property, a loan against property is a more beneficial option than a home loan.