When I shower, my hands get dry with the rest of my body using the body towel. My hand towel is a separate smaller towel by my sink that I use after eliminating waste and subsequently washing my hands.

I don’t go as extreme as OP. I have 3 towel types: large body towel that I use to dry my entire face/hair/hands/body after bathing. Smaller hand towel by the sink for drying hands/face after using the sink. And finally a separate medium-sized hair towel to wrap my long hair for further drying after I’ve already got most of the water off with my body towel. I’ll wear that towel for 5-10 minutes after bathing. That towel isn’t necessary for short hair.