Personal Loan vs Loan Against Property; How to Decide?

Life is filled with uncertainties and financial emergencies can arise anytime. As an adult, you might be aware of the fact that not all things go according to plan. Any new unexpected event that demands your immediate attention has the potential to drain your finances. Thankfully, our market is replete with legitimate lenders who provide customers with many different loans. It’s essential that you’re aware of the different types of loans available in India. By being cognisant, you can make informed financial decisions and obtain the best possible deals. In this piece, we will be discussing the differences between personal loan and loan against property. Firstly, let’s discuss the two types briefly. 

Personal Loan

As the name suggests, personal loan is an unsecured loan that you can obtain from a regulated financial institution for your personal use. You could utilise the loan amount for a variety of purposes like constructing a house, paying off your debt starting a new business or even for your wedding, etc.; no questions asked. 

Loan Against Property 

A loan against property is a secured loan which is provided against the mortgage of your property. The property could be residential, commercial, industrial or even just a piece of land. Just like personal loan, you could use the loan amount for any purpose like financing your child’s education, managing wedding expenses, repaying another debt or buying a new car. 

Now, let’s discuss the differences between personal loan and loan against property. 

Processing time 

Generally speaking, the processing time for loan against property is anywhere between 15 to 30 days. This is because your property is considered as collateral. Personal loans, on the other hand, are approved and disbursed much quicker as they don’t require any collateral. 

Interest rates

Since loan against property is secured, interest is generally lower than that of personal loan. Please note that your credit score will be considered for determining your interest rate regardless of the loan type. 


The repayment tenure for loan against property can be up to 20 years, whereas the same for personal loan is generally around 5 years. 

Loan amount 

The market value of your property will determine your loan against property eligibility. You’ll find the loan against property calculator on the Bajaj Finserv Markets website. It’s recommended that you utilise this loan against property EMI calculator for ascertaining your monthly instalments.  

In conclusion, there is no straightforward answer to the question at hand. In fact, you could be benefitted from both these types of loans. 

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