r2i forum

I am considering borrowing some money against my flat in HYD, which is fully paid.
When I talked to few banks(ICICI, HDFC), they said that they don't provide 'home loans' against already owned property. They said that I need to go via root 'Loan against property' which is much more expensive. Typical home loan these days carries an interest rate of 8-9% and where as 'Loan against property' carries a rate of 13-14%.

To me it seems illogical that I can not avail of 'home loan' on a fully paid property. Is that I am missing some thing here?

Exactly my experience. I believe banks want to fund new development otherwise everyone will jump into the fray to get a loan. You can sell the same flat to your wife/siblings and they can avail the loan at the lower amount. However you will have to pay registration and stamp duty

The individual takes the loan by mortgaging the house property while the personal loan is for personal use. Personal loan is having the higher rate of interest compared to the Loan against Home. Loan against Home is the secured loan while the other is unsecured loan.

A loan of property is one of the best ways to raise money. The only drawback to this loan is that if the borrower does not pay the entire loan, the bank or financial institution shall take possession of the mortgaged property. Make your decision based on their ability to pay.

Loan against property has just appointed a loan or mortgage loans property.You can usually take out a loan against their self-occupied or rental property. This could be a house or a piece of land.Loan against the property belongs to a class of secured loan in which a borrower gives a guarantee for the use of their property as collateral.

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