Buying a home on credit is a profitable alternative to renting. You get your own apartment, you can do any repairs in it, and the monthly payment can be approximately equal to the rent. There are two ways to buy real estate on credit: regular consumer lending and mortgage. We will tell you how they differ, what advantages and disadvantages they have.
Differences between a mortgage and a consumer loan
Consumer credit is a broad concept. It includes all loans that banks issue to individuals. A mortgage is also a consumer loan, but with a number of features. The main one is the intended purpose. Mortgage funds are used exclusively for the purchase of housing, which leads to other subtleties of lending.
The table below shows all the main differences between a lithuania mobile database non-targeted consumer loan and a mortgage.
To clearly demonstrate the difference, we have indicated average values in the table. You can find non-targeted lending programs for a term of more than 5 years and an amount over 3 million ₽, as well as with an interest rate of more than 20%. This does not include preferential housing programs with reduced rates and special non-targeted loans with security - secured by property and with a surety. They can be used to receive large amounts for a long term and at a low interest rate.
Advantages of a consumer loan
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To get a non-targeted loan, you do not need to collect documents about the apartment you are going to buy. This significantly simplifies the preparation. Applications for such programs are also processed faster than for mortgage loans.