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