Side-by-side comparison
| Personal loan | Loan against property | |
|---|---|---|
| Collateral | None | Residential or commercial property |
| Interest rate | Higher | Much lower |
| Typical amount | ₹50,000 to ₹40 lakh | ₹10 lakh to ₹10 crore+ |
| Tenure | 1 to 5 years | Up to 15 years |
| Processing time | 1 to 3 days | 1 to 3 weeks (property checks) |
| Documents | Light | Income plus full property papers |
| Risk | Credit score impact if unpaid | Property can be taken if unpaid |
When a personal loan makes sense
- You need money within days
- The amount is modest and you can repay in a few years
- You don't own property, or don't want to mortgage it
When a loan against property makes sense
- You need a large amount at a lower rate
- You want a long tenure for a smaller EMI
- You're consolidating several high-interest loans into one
Rule of thumb: for small, short-term needs choose a personal loan; for large, long-term needs a loan against property usually costs far less in total interest.
Frequently asked questions
Usually yes. Because it is secured by property, the interest rate is typically much lower, and the longer tenure reduces the EMI.