Write the difference between loan and mortgage.

The major differences between loan and mortgage are as follows −

Loan

• It has high interest rates.

• It can be secured/unsecured.

• It is not collaterally backed.

• The loan period is less as compared to mortgage.

• There are few formalities in case of unsecured loans when compared to mortgage.

• It requires less documentation.

• Examples − open ended loans, close ended loans, student loans, payday loans etc.

Mortgage

• It has low interest rates.

• It is always secured.

• It can be backed collaterally.

• The loan is period is more as compared to loan.

• There are strict measures for loans in mortgage.

• It requires more documentation.

• Examples − VA Loan mortgage, reverse mortgage, adjustable rate mortgage, fixed rate mortgage etc.