In Bangladesh, people often need loans for different reasons — buying a house, renovating, covering medical expenses, or managing education costs.
But when it comes to choosing between a personal loan and a home loan, the decision can be confusing.
This guide will help you understand the key differences, interest rates, eligibility, and which loan suits your financial goals.
Want to know your exact monthly payments? Try our Bank Loan Calculator or Personal Loan EMI Calculator.
What Is a Personal Loan?
A personal loan is an unsecured loan — meaning you don’t have to pledge property or assets as collateral.
Banks offer it for multiple purposes: travel, medical emergencies, home renovation, or personal expenses.
Features
- No collateral or mortgage needed
- Faster approval (usually 24–48 hours)
- Tenure between 1 – 5 years
- Interest rate between 10 – 15 % per year
- Smaller loan amount (usually up to BDT 20 – 30 lakh)
Check your affordability with our Personal Loan Calculator.
What Is a Home Loan?
A home loan is a secured loan — given for buying, building, or renovating a house.
You pledge the property as security until you repay the loan in full.
Features
- Requires property as collateral
- Longer tenure (5 – 25 years)
- Lower interest rate (8.5 – 10.5 %)
- Higher loan amount (up to 80 % – 90 % of property value)
- Includes tax and registration costs in many cases
Calculate your monthly payment using the Home Loan Calculator.
Personal Loan vs Home Loan: Key Differences
| Feature | Personal Loan | Home Loan |
|---|---|---|
| Security | Unsecured | Secured (property as mortgage) |
| Purpose | Flexible – any personal need | Only for house purchase/build/renovation |
| Loan Amount | Up to BDT 30 lakh | Up to BDT 1 – 5 crore |
| Interest Rate | 10 % – 15 % | 8.5 % – 10.5 % |
| Tenure | 1 – 5 years | 5 – 25 years |
| Approval Speed | Fast (1 – 2 days) | Slower (needs property valuation) |
| Tax Benefit | None | Eligible for tax rebate on interest |
| Collateral | Not required | Required |
| Prepayment Penalty | 1 – 2 % | 1 – 3 % |
| Ideal For | Short-term personal needs | Long-term property investment |
Example: Comparing EMI for Both Loans
Let’s assume you need BDT 10 lakh.
| Loan Type | Tenure | Interest Rate | Monthly EMI | Total Payable |
|---|---|---|---|---|
| Personal Loan | 5 years | 13 % | ≈ BDT 23,000 | ≈ 13.8 lakh |
| Home Loan | 10 years | 9 % | ≈ BDT 12,700 | ≈ 15.2 lakh |
Even though the home loan runs longer, the EMI is almost half, which helps cash flow — but total interest paid is higher over time.
Calculate your actual EMI using the EMI Calculator BD.
Which Loan Should You Choose?
Here’s how to decide logically:
Choose a Personal Loan if:
- You need money quickly (medical, wedding, renovation).
- You can repay within 2 – 3 years.
- You don’t own property or prefer no collateral.
Choose a Home Loan if:
- You want to buy or build property.
- You can commit to long-term repayment.
- You want a lower interest rate and potential tax benefits.
Expert Tips Before You Apply
- Compare rates across banks like DBBL, BRAC, EBL, and Prime Bank.
- Use calculators to estimate your EMI and total interest.
- Check your CIB credit score — it affects approval.
- Avoid over-borrowing — keep EMI within 30 – 40 % of your monthly income.
- Read loan terms carefully, especially prepayment rules and processing fees.
You can also explore specific calculators like the DBBL Loan Calculator or Interest Calculator BD to compare costs.
FAQs: Home Loan vs Personal Loan in Bangladesh
1. Can I use a personal loan to buy a house?
You can, but it’s costlier and has a shorter tenure than a home loan. Financial planning becomes easier when you use Loan Calculator BD to estimate your total loan cost.
2. Which is easier to get approved?
Personal loans have faster approval because they don’t need property valuation.
3. Can I get tax benefits on home loan interest?
Yes — under NBR rules, interest on home loan payments can qualify for tax rebate.
4. What happens if I miss EMI payments?
Both loans will attract penalties and impact your CIB credit score.
5. Can I transfer my personal loan to a home loan later?
Usually no — they are treated as separate products with different rules.
SADIP is the creator of LoanCalculatorBD.com, a trusted resource for accurate and easy-to-use financial calculators tailored for users in Bangladesh. With a deep understanding of personal finance and local banking needs, SADIP is dedicated to helping individuals make smarter loan decisions. His mission is to simplify complex calculations and empower users with clear, reliable tools for managing their finances with confidence.
