What is Loan?
💡 What is a Loan? A loan means borrowed money. When you need money for something and you don’t have enough, you borrow it from a bank or a financial institution.
Home Loan vs Personale Loan Diffrence
Peronal Loan:
Imagine you suddenly need money for a wedding, home repairs, children’s school fees, or travel. In such cases, a personal loan helps.
- The bank doesn’t usually ask for collateral.
- The interest rate is higher because the bank is taking more risk.
- You get the money quickly and can spend it anywhere you need.
- Repayment is short-term, usually within 1–5 years.
👉 Think of it as “instant help money” from the bank.
Home Loan:
Now imagine you want to buy a house or build a new one. For this, you take a home loan.
- The house itself becomes the collateral for the bank.
- Interest rates are lower because the bank has security.
- Repayment is long-term, usually 10–30 years.
- The money can only be used for house-related purposes.
👉 Think of it as a “long-term partner” — you repay slowly in installments, but in return you get your own home.
