Can I take a personal loan for a home loan down payment?
Technically speaking yes you can do that as personal loan funds can be used as and where you need them. Financially speaking it may be a very bad idea as the high interest rates on loans like personal loans will only make repayment tougher with a higher chance of
default. Rather create a financial corpus or look at liquidating some investments for home loan down payment money.
The relatively high interest rates attached to Personal Loans is a significant deterrent to using this financial product as a method to finance the down payment on a Home Loan. Another disadvantage of using Personal Loans as a way to fund the down payment is that there are no tax benefits on taking a Personal Loan for a down payment on a Home Loan. For these reasons, a Personal Loan should ideally be your absolutely last resort when arranging finances for the down payment.
Opting for a personal loan can be a costly affair, as interest rates are very high. If you don’t have enough savings or assets to pay up the money, then it’s wise to wait and build assets and savings that can come handy for the down payment when the time is right.