Can You Use a Personal Loan to Make a Down Payment on a House?

Nowadays buying a home or investing in property involves a lot of planning and preparation with respect to finances. Most of the property sellers ask you to pay a down payment of 20% of the total property cost. When you face a situation like this, a personal loan can always come handy. You can pay the down payment by quickly applying for a personal loan. There are many online lenders who offer an instant personal loan to help you realize your dream.

Why Opt for a Personal Loan?

It is difficult to get a home loan on short notice, as the down payment is huge and banks will take a lot of time to assess the validity of the property and the documents. The seller cannot hold the property or wait for so long without closing the deal. So, opting for a personal loan during such emergencies is the best option as you can receive the funds almost instantly. Most of the personal loans available are unsecured loans, so you need not pledge any of your valuable assets as a collateral to avail a loan.

It is advisable to conduct better research and approach a lender who meets your requirements. Then, apply for a collateral-free loan. If you have a good credit score and if you are meeting your lender’s eligibility criteria, then there are high chances of your personal loan getting approved with competitive interest rates.

If you can’t afford a personal loan, you can also opt for other options such as:

  • Opt for a Pradhan Mantri Awas Yojana scheme – The Pradhan Mantri Awas Yojana (PMAY) was launched by the government to provide affordable housing solutions to Indians. If you are beneficiary of this scheme, you will receive an interest rate subsidy of up to 6.5% on your home loan. This way, you will have a lower EMI amount compared to your actual estimation. You can use this amount to pay your home loan down payment.
  • Get funds from your investments – If you have a solid investment portfolio, such as investments in shares, mutual funds, FDs, etc., you could sell some of them to raise a low-interest loan against securities. You will be sanctioned with a high amount on nominal interest when you pledge your securities and use these funds for your home loan down payment.


Buying a home is like a dream come true. Never compromise on your dreams if you are short of funds. A personal loan always comes to your rescue when you need money immediately. If you are looking for a lender who provides loans quickly, FlexSalary is the best option. You can apply for a loan from a minimum of INR 4,000 to a maximum of INR 2,00,000.

FlexSalary offers a line of credit which comes handy whenever you need urgent money. You can simply withdraw money from your line of credit rather than applying for a personal loan and waiting for its approval. Moreover, there is no prepayment penalty. You can even repay the borrowed money in flexible payments.