Both Home Loan and Loan Against Property (LAP) use property as security, but they serve very different purposes. Choosing wrong can cost you lakhs in extra interest and lost tax benefits.
Quick Comparison Table
- Purpose: Home Loan — buy/construct house | LAP — any personal/business need
- Interest Rate: Home Loan 8.10%–9.25% | LAP 9.50%–11.50%
- Tenure: Home Loan up to 30 years | LAP up to 15 years
- Loan Amount: Home Loan up to 90% of property | LAP up to 60%–70%
- Tax Benefit: Home Loan ₹2L (interest) + ₹1.5L (principal) | LAP only if used for business
When to Choose a Home Loan
- You are buying or constructing a residential property
- You want maximum tax savings under Section 24 and 80C
- You want the lowest interest rate possible
When to Choose LAP
- You already own a property and need funds for business expansion
- Children's higher education abroad
- Medical emergency or large personal expense
- Debt consolidation at lower rate than personal loan
Eligibility
Both require stable income, CIBIL 700+, and a clear-title property. LAP accepts residential, commercial and industrial property; Home Loan only for the property being purchased.
Final Verdict
If you are buying a house — always Home Loan. If you need funds and own property — LAP is cheaper than personal/business loan but pricier than home loan. At Banking Hub Services Agra, we evaluate your case free of cost and recommend the right product.