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Home > Home Loan > Loan Against Property > Why Choose a Loan Against Property Over a Medical Loan?

Why Choose a Loan Against Property Over a Medical Loan?

March 28, 2025
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Medical emergencies can strike without warning, requiring immediate financial solutions. Understanding what a medical loan is and how it compares to other options, like a loan against property, is crucial for making the right choice.

This guide simplifies the comparison, helping you choose the most suitable option based on your needs. Both options offer vital financial support, but they differ in terms of features, eligibility, and benefits. Knowing these differences allows you to make an informed and confident decision, whether you need quick funds or long-term financial support.

Loan Against Property vs Medical Loan

When facing medical emergencies, selecting the right loan is crucial. Medical loans and loans against property are two popular options, but they serve different purposes and come with distinct features. Understanding these differences helps make informed decisions during stressful times.

Here’s a straightforward comparison between medical loans and loans against property:

AspectMedical LoanLoan Against Property
PurposeSpecifically designed to cover medical expenses.It can be used for any purpose, including medical emergencies.
EligibilityCredit score: Good to excellent.

Employment: Stable, with proof required.

Income: Stable, with proof required.

Age: Minimum 21, maximum varies by loan term.
Ownership: Valid, dispute-free property required.

Property type: Residential or commercial.

Income: Stable, with proof required.

Credit history: Good.

Age: Minimum 18 years at application, maximum 70 years at maturity.
Loan AmountRanges from ₹50,000 to ₹40 lakh, suitable for diverse medical needs.Amounts from ₹5 lakh to ₹5 crore+, tied to property value, for extensive financial needs.
Interest RateRates range from 11% to 24%, influenced by credit score, income, and lender policiesRates vary from 9% to 18.60%, typically lower due to the security of property collateral.
Repayment TenureRanging from 1 to 5 years.Up to 15–20 years.
RiskNo collateral is required, so there is no risk of losing assets.High risk if you fail to repay; your property may be seized by the lender.
Best ForQuick funding for urgent medical needs.High-cost medical treatments or if a larger amount is required.

Read More: How to Apply for LAP without Income Proof?

Why Can a Loan Against Property Be a Smarter Choice Than a Medical Loan?

When faced with medical expenses, comparing loan options helps make better financial decisions. A loan against property often stands out due to its advantages, especially for substantial and long-term funding needs. Let’s explore five detailed reasons why it might be a better option than a medical loan:

1. Lower Interest Rates

One of the biggest benefits of taking a loan against property is that it typically comes with lower interest rates compared to an unsecured medical loan. The reason? When you pledge a property as collateral, you give the lender a security blanket. 

If, for some reason, you can’t repay the loan, they have the right to sell the property to recover the outstanding amount. This lowers the lender’s risk, which often translates into lower interest rates for you.

2. Higher Loan Amounts

Medical treatments, especially critical care or specialized procedures, can be costly. A loan against property allows you to borrow a significantly larger amount compared to unsecured loans.

The loan amount depends on the value of your property, which can be considerable. This makes it ideal for covering expensive medical procedures, long-term treatments, or even multiple medical emergencies.

3. Longer Repayment Period

Managing medical expenses alongside daily living costs can be challenging. Loans against property often offer repayment terms of 10 to 15 years (or longer in some cases), giving you the flexibility to choose manageable EMIs.
In comparison, unsecured medical loans usually come with shorter tenures, which can strain your finances. A longer repayment period helps reduce monthly outflow, letting you focus on recovery.

4. Flexibility of End-Use

Unlike some loans that come with restrictions on usage, a loan against property provides you with the freedom to allocate the funds as needed.

Whether it’s for hospital bills, post-operative care, medication, specialized equipment, or even travel expenses for treatment abroad, you can use the money where it’s most required without worrying about specific conditions.

5. Easier Approval for Established Property Owners

If you own a property and have maintained a good repayment track record for existing loans or taxes, your chances of approval for a loan against property are higher.


Lenders feel reassured knowing there’s a tangible asset backing the loan, making the approval process smoother. This can be especially helpful in emergencies where quick access to funds is critical.

Read More: Loan Against Property Eligibility Criteria

Compare Loan Against Property Interest Rates – 2025

Banks/ NBFCsRate of InterestMaximum Loan Amount
SBI10.60% p.a. – 11.30% p.a.Rs. 7.5 Crore 
HDFC9.50% p.a. – 11.00% p.a.65% of the market value of the property
IDFC9.25% p.a. onwards50% – 70% of the market value of the property
Tata Capital14.25% p.a. onwardsDepending on the market value of the property
Axis Bank10.50% p.a. – 10.90% p.a.Rs. 5 Crore
Kotak Mahindra Bank9.50% p.a. onwardsRs. 5 Crore
Bank of India10.10% p.a. Per lakhRs. 5 Crore
LIC Housing Finance9.70% p.a. – 11.55% p.a.Rs. 2 lakhs onwards
PNB Housing Finance9.24% p.a. – 12.75% p.a.70% of the market value of the property
ICICI Bank10.85% p.a. – 12.50% p.a.75% of the market value of the property

Please note that these are indicative numbers, please refer to the official websites for the latest updated details.

How Can Credit Dharma Support You?

Medical emergencies requires timely funding. The right financing choice can significantly impact a life. At Credit Dharma, we make this possible by offering lowest guaranteed Loan Against Property interest rates that keep your monthly payments manageable, allowing you to enjoy more of what truly matters.

But that is not it. We offer:

  • Guaranteed up to 100% funding
  • Receive lifetime assistance and expert guidance long after your loan is approved.
  • Enjoy a fully digital process with minimal paperwork 
  • Get your loan approved within just 1-2 weeks.

Frequently Asked Questions

What is a medical loan?

A medical loan is an unsecured loan designed to cover healthcare expenses like surgeries, treatments, or hospital bills.

How is a loan against property different from a medical loan?

A loan against property is secured by collateral and offers lower interest rates and higher loan amounts compared to a medical loan.

Which loan is better for emergencies?

Medical loans are better for quick approval and smaller amounts, while loans against property suit high-value needs but take longer to process.

Can I use a loan against property for other expenses?

Yes, a loan against property can be used for any purpose, including non-medical expenses.

What documents are needed for a medical loan?

You typically need proof of identity, income, and medical bills or estimates for a medical loan.

Are medical loans risk-free?

Yes, medical loans don’t require collateral, so your assets remain safe even if you default.

Is a credit score important for both loans?

Yes, a good credit score increases your chances of approval and better interest rates for both types of loans.

Can I repay a medical loan early?

Most lenders allow prepayment of medical loans but check for any associated charges before doing so.

Which loan offers longer repayment terms?

Loans against property offer longer repayment tenures, often up to 20 years, while medical loans usually range from 1 to 5 years.

Do both loans require proof of income?

Yes, lenders require proof of income to assess repayment ability for both medical loans and loans against property.

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