Which One Should You Choose — and Why It Matters
Buying a home is a dream come true — but it also comes with some big financial decisions. One of the most common questions people ask is:
“Should I go for a home loan or take a personal loan to buy a house?”
While both options give you access to funds, they work very differently. In this blog, we’ll explain the key differences between the two — from interest rates and EMIs to tax benefits and repayment flexibility — so you can make the smartest choice for your situation.
1. Home Loan vs Personal Loan: What’s the Difference?
Let’s start with the basics. Here’s how the two loan types compare:
| Feature | Home Loan | Personal Loan |
| Type | Secured (property is collateral) | Unsecured (no collateral needed) |
| Usage | Meant for buying/building a home | Can be used for anything |
| Interest Rate | Lower (~8%–9%) | Higher (~11%–18%) |
| Tenure | Long (up to 30 years) | Short (1–5 years) |
| EMI | Lower EMIs | Higher EMIs |
| Tax Benefits | Yes (under Sections 80C & 24b) | No tax benefits for home buying |
The takeaway: Home loans are made specifically for buying property — they’re more affordable, offer tax benefits, and give you more time to repay.
2. Interest Rate and EMI Comparison
Here’s a simple example to show how much you might pay:
Let’s say you borrow ₹10 lakh.
| Loan Type | Tenure | Interest Rate | EMI (Approx.) |
| Home Loan | 20 years | 9% | ₹9,000/month |
| Personal Loan | 5 years | 14% | ₹23,000/month |
As you can see, the EMI on a personal loan is much higher — even though the loan amount is the same. This is why home loans are better for big-ticket purchases like a house.
3. Repayment Tenure and Flexibility
One of the best things about home loans is that you can stretch repayment over 15–30 years. That means:
- Smaller monthly EMIs
- Less pressure on your budget
- More flexibility for other expenses
With personal loans, the tenure is short — usually between 1 to 5 years — so you’ll need to pay much higher EMIs.
If you’re looking for long-term affordability, home loans give you more breathing room.
4. Tax Benefits: Only with Home Loans
This is a major reason why home loans are the smarter choice.
With a home loan, you can:
- Claim up to ₹1.5 lakh per year under Section 80C (on principal repayment)
- Claim up to ₹2 lakh per year under Section 24(b) (on interest paid)
That’s ₹3.5 lakh in potential tax savings — every year.
With a personal loan, you don’t get any tax benefits if you’re using it to buy property. So if saving on taxes matters to you, a home loan clearly wins.
5. When Might a Personal Loan Make Sense?
While home loans are better for buying property, personal loans can help in a few cases:
- You only need a small amount, like for a down payment
- You already have a home loan and need some extra funds
- You need money urgently and can repay it quickly
But for buying a house itself, a personal loan usually isn’t the best choice. It costs more, offers no tax perks, and the repayment period is shorter.
Final Thoughts: Home Loan is the Smarter Pick for Home Buyers
If you’re planning to buy a house, a home loan is almost always the better option. It’s designed for property purchase, comes with lower interest rates, gives you more time to repay, and helps you save on taxes.
A personal loan may help in special cases — but it’s not ideal for funding the entire home.
And with platforms like Easy Home Finance, you can now apply online, get approved faster, and enjoy a fully paperless home loan journey — from start to finish.
Ready to take the next step?
Apply for a Home Loan with Easy Home Finance : https://easyhomefinance.in/site/apply
Check Your Eligibility Instantly : https://easyhomefinance.in/loan
Learn More About Our 100% Digital Process : https://www.easyhomefinance.in
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