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Personal Loan and a Home Equity Loan

By: Riya Gote

A to Z Experience

You can now get loan easily if you have a good credit score

Oct 2022

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Both a personal loan and a home equity loan offer one-time, lump-sum payments that must be repaid in instalments over a predetermined period of time.

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Home equity loans are a particular type of secured loan in which the borrower's home is used as collateral, which is the primary distinction.

Images Credits: Unsplash

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Contrarily, personal loans are a considerably broader and more diverse category that can be secured or unsecured by collateral.

Images Credits: Unsplash

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Both personal loans and home equity loans offer lump sum payments that must be repaid in instalments over a certain time period.

Images Credit: Unsplash

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Personal loans can be secured or unsecured by collateral, unlike home equity loans, which use the borrower's property as collateral.

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While home equity loans need a property evaluation and a more drawn-out application and approval process, personal loans are typically quicker and easier to approve.

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Personal loans and home equity loans typically have lower interest rates than credit cards, but both typically have lower rates than personal loans.

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Both loan kinds are flexible and can be used for a range of objectives, while home equity loans, which are based on the borrower's home value, can offer higher sums.

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Personal loans can typically be obtained more quickly and easily than home equity loans because they typically have a less rigorous approval process.

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Even though they typically take longer to get approved, home equity loans typically have lower interest rates than personal loans and may even have a higher maximum loan amount.

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However, it's crucial to take into account the loan's intended use as well as the quantity you require before choosing either course of action.

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Personal loan, student loan, home loan, holiday loan, medical loan, business loan, and so on.