Understanding Home Loans & Personal Loans
Home Loan
A home loan is a secured loan offered by banks and financial institutions to help individuals buy a house. The interest rates are usually lower compared to personal loans, and the tenure can extend up to 30 years.
How Home Loan EMI is Calculated?
We use the standard EMI formula: EMI = [P x R x (1+R)^N] / [(1+R)^N – 1] where, P = Loan Amount, R = Monthly Interest Rate, N = Number of Months.
Personal Loan
A personal loan is an unsecured loan taken for various personal needs, such as medical expenses, travel, or wedding costs. These loans have higher interest rates and shorter tenures compared to home loans, and the tenure can extend up to 5 years.
When Should You Choose a Personal Loan?
Choosing the right loan depends on your financial goals. Home loans are ideal for property investments with long tenures, whereas personal loans offer quick access to funds for urgent needs with flexible usage.
If you need quick cash without collateral and can repay it in a shorter period, a personal loan is the right choice.