Different Types of Bank Loans in India

Loan is one of the widely used source of finance across the industries. Know more about the different types of banks loans available in India.

1. Types Of Bank Loans in India

2. What is Loan ? A loan can be money, property or material goods received from bank, friends, or any other financial institution. This amount is repaid along with interest in specific time period. It can be specific one-time amount or open-ended line of credit with certain limit. 2

3. Categories of Loans 3 Categories of loans U nsecured Personal Loans/Purpose loans Credit card S ecured Car loan H ome loan Loan Against Property Education Peer-to-Peer …….

4. Secured v/s Unsecured Secured loans Secured loans are the ones which is backed by a collateral. This collateral can be kept by lender in case one is not able to repay the loan in pre-determined time. It tends to have lower interest rates. Unsecured Loans Unsecured loans are not protected by any collateral. In case of default, lender won’t be able to seize any asset of borrower. It tends to have higher interest rates because of higher risk 4

5. Different types of loans Personal Loans Business loans Car loan Home Loan Marriage Loan Education loan Payday loans T wo wheeler loan T ravel loan Consumer durable loan 5 Cash loan Medical loan Loan against Property

6. * It’s a loan that allows potential buyer to pay off the vehicle through EMIs where as bank pays full which is repaid by borrower along with interest. # Types of car loans - For a new car - For a used car - Against an existing car * Loan amount can be 2.5-3 times annual salary for salaried person and 6 times annual income for self employed * Documents required: Identity proof, resident proof & income proof 6 Car Loans

7. 7 * Lender gives home loan against a property and in case of default, the bank or lending company has legal rights to sale the property and recover the outstanding loan amount. # Types of home loans - Home purchase - Home renovation - Land Purchase - Home construction & few more * It falls under category of secured loans and tenure is fixed ranging from 5-30 years. Home loan

8. Place your screenshot here 8 * It is unsecured loan used for many purposes like wedding, business, home renovation, medical emergency, debt consolidation, etc. * Its benefits include: flexibility of use, easy availability, no collaterals, & minimum documentation. * Age , number of years in current job and in current residence, income, etc. are some of the factors that are considered before giving loan. Personal Loans

9. * It can be availed for fulfilling the urgent needs of growing business. It can be used for extending the business, improving production, buying new machinery, etc. # Types of business loans - Working capital loan - Business loans for women - SME & MSME loans * It requires information about financial statements, accounts receivable, accounts payable, insurance details, etc. 9 Business loans

10. * It is kind of a purpose loan which falls under unsecured loan category. * Weddings in I ndia is a great affair as it comes with lot of planning and expenses. Marriage loan helps you organize a wedding smoothly. * It has higher rates starting from 11% to 24-25%. It depends on creditworthiness, repayment history, sources of earning, credit score, etc. * In addition to this, processing fee of 1-3 % is levied on marriage loans. 10 Marriage loans

11. * Education loan is very important aid for those who wants to study further but do not have enough funds. * Some of the benefits of education loans are tax benefits, deferred repayment, lower interest rates, builds good credit history, etc. * Factors considered for giving this loan is university where education is sought, eligibility of co-borrower, evaluation of collateral, etc. * It can be availed for higher education in I ndia, loan for study in abroad, executive MBA, etc. 11 Education loan

12. * Loan against property is nothing but a loan which you avail by keeping your commercial/residential property as a collateral. Another name for Loan against property is a secured loan. * The security in this kind of loan is the property owned by the person applying for the loan . * Some of the advantages includes lower interest rates, higher value loans and unlocks the true potential of asset. * Things checked before giving this loan are property value and type, income, creditworthiness, etc . 12 Loan against property

13. * A payday loan is a type of short-term borrowing where a lender will extend high interest credit based on a borrower’s income and credit profile . * A payday loan’s principal is typically a portion of a borrower’s next paycheck. * Payday loans charge borrowers high levels of interest. * These loans may be considered predatory loans as they have a reputation for extremely high interest and hidden provisions that charge borrowers added fees. 13 Payday loans

14. * A consumer durable loan is a credit/finance option for the purchase of household appliances, electronic goods etc. * The loan covers a whole range of products ranging from household necessities like a washing machine to luxury gadgets like a high-end smartphone. * The amount and tenure differs according to each lender and the product that you wish to purchase. * The durable loan amount could range from a few thousands to a few lakhs, while the tenure could range from 8 months to 3 years. 14 Consumer Durable Loan

15. * Everyone has dream holiday destination and travel loan help you turn those dreams into reality by funding them. * Eligibility criteria : - Minimum 21 years of age - 6 months in current job - Good credit score (at least 600-700) - Income of at least 20,000/month * These are indicative criteria which can change from lender to lender. * Pre-approved loans can be availed if one is already a customer of concerned bank.. 15 Travel loan

16. * This loan amount is received by borrower in cash. It can be given to private individual as personal loan or to business as a business loan. * This is also a unsecured loan but lender do make sure that it is repaid in any circumstances. * These loans are of small amounts whose tenure is not more than a year * It can be availed by those individuals who do not have cash in hand but are capable of repaying it in near future. 16 Cash loan

17. * Medical loan can come handy when there is medical emergency and insurance cannot cover the expenses. * Healthcare is becoming very expensive nowadays so medical loans are savior in bad times. It can be used to pay medical prescription bills, surgeries, hospital bills, other treatments, etc. * Benefits of Medical Loan: - Minimum documents required - Instant verification. - Fast approval and disbursal in 24 hours - Repayment terms as per borrower. 17 Medical loan

18. * In todays fast moving world, two-wheelers are common man’s rescue shield because buying a car is not affordable by everyone. * Two wheeler loan offers greater leverage for those with lower annual income. Someone with 50,000 annual income can also avail this loan. * It also has flexible tenure of up to 4 years. This reduces the EMI amount and thus is doesn’t affect borrowers monthly budget. * Some lenders don’t take any extra charges thus helping buyer to clear off their debts faster. 18 Two-wheeler Loan

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