Write the difference between loan and mortgage.

Banking & FinanceManagementCompanies/Organisations

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.

raja
Published on 25-Jul-2020 10:44:42
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