A Comparison between Home Loan and Loan against Property LAP Mortgage Loan
1. Purpose
Home Loan: Used to buy, assemble, or renovate a residential property.
Loan Against Property (LAP): for Any objective
2. Loan-to-Value (LTV) Ratio
Home Loan: Up to 75-90%
LAP: Typically 50-75%
3. Interest Rates
Home Loan: ranging from 8-9% p.a.
LAP: Higher round 10-15% p.a
4. Tax Benefits
Home Loan:
Section 24(b): Deduction as much as ₹2 lakh on curiosity paid.
Section 80C: Deduction as much as ₹1.5 lakh on principal reimbursement.
LAP: No tax advantages
5. Tenure
Home Loan: Up to 30 years
LAP: Usually 5-15 years
6. Processing Fees & Charges
Home Loan: Upto 5000
LAP: 1-2% of mortgage quantity + GST (greater resulting from danger evaluation).
7. Prepayment Charges
Home Loan: NIL
LAP: May have greater prepayment penalties (varies by lender).
Murari Garg
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