What are different types of bank loan in India? : It’s answer is explained here in this article. Getting a bank loan approved earlier was not that easy as much as it is now. Bank Loans are meant for easing up the situation where you are in need of an ample sum of money and you don’t have it at that moment. So to get out of that situation what you do is apply for a bank loan and then pay later to the bank in the form of installments. In India as well the types of loans were much limited but with time there has been an increase from the bank side to support out the general public.
Banks are the lenders, who require a certain amount of surety in return so that the applied loan get be passed. But there are times when the thing for which the loan is being taken up becomes the surety and no extra thing is required to be kept under their possession.
Types of bank loan in India
Following are the various types of bank loan in India :
1. Personal Loan
Personal loan as the name suggests are meant for the personal use of the customers. They can either start from hundreds and go till in thousands. They can be taken up to pay the bills or buy out any electronic device for the home. However, getting the loans of this kind you need to show your income or any other asset that is equal to the loan amount that you wish to take.
Personal loan is taken up for a small duration, so if you end up taking a huge amount of loan then you need to pay it up on time before the duration ends. Also, a drawback, to them is that they give high-interest rates.
2. Credit Card Loan
Credit cards are plastic money, which totally acts as a lender. So these credit card loan are such that you apply for your credit card and use it out by buying whatever you wish to buy. However, there is always a day limit set up for using the credit card.
Under this type, there is usually a billing cycle that comes to you on when you use your credit card which is your duty to pay it up. You do your shopping pay by the “credit card“, and the amount later than has to be paid when the bill comes at home.
3. Home Loan
Home Loan are for a longer duration extending up to 20-30 years. They are given on the basis of checking your credit score, if your credit score is good then there is a high chance that you will be charged a low rate of interests on your home loan.
There has always been a competition between the banks to provide up loans for the needy ones and they tend to give out the best possible deals. However, a home loan is not just limited to getting a loan so that you can buy a new house, but it is also for home renovations, home extensions or even just purchasing the land property.
4. Car Loan
Owning out a dream car is one moment of happiness that cannot be measured but surely everyone deserves to feel it out once. The “Car loan” do not have much high-interest rates set up, they can be dealt with in a low amount as well. All you need to do is to apply for the car loan and they will surely first look into your “credit score” and put forward it accordingly.
Under this, the car you buy becomes the asset and in case you are not able to pay up the loan to the lender they take up the car and pay the remaining debt through it.
Click Here: How to get a car loan in India
5. Two Wheeler Loan
Similar to what we get in a Car loan is what we get in the Two-wheeler loan as well. Two-wheeler can always come in handy and are much easy to even use as well. If you wish to drive in the city which usually has a lot of traffic or go to some nearby places then this is the best option to consider.
However, if you do not pay the loan with the interest on time then you might end up giving your scooter to the lender to recover the debt.
6. Education Loan
To get education is a right given under the constitution for all the people in India. Education is important in life to grow and learn and differentiate between what is right and what is wrong, with a focus on this the banks in India have come up with the plan of providing education loan to the students who either in pursuing college undergraduate degrees or going for post-graduation as well.
However, there is a list of documents that need to be given so that you are eligible to get the education loan approved.
Click Here: How to get a student loan from Bank in India
7. Small Business Loan
If you wish to start up a small business or open up a shop or invest in some business idea, then you can always apply for SBL. The tenure of repaying the loan can be from 5 years to even 25 years. When you enter into such a thing you always have to show up the tax payments and the profit that is being earned under the business.
However, it is must under this that you have to put up your collateral assets as collateral to ensure that the loan can be paid up.
Click Here: Best Bank for current account
8. Loan against Fixed Deposit
We all have made FD’s in some of the other bank accounts. So you also have an option for going after your FD, making it the asset for your loan. However, the rate of interest with such kind of loan is a bit higher than what you are getting on your FD.
In case you have an “FD” of about 8 lakh then the provided loan will be of 6 lakh and it goes so on.
Click Here: Best Bank for Savings Account
9. Loan against Mutual Funds and Shares
The other idea that can come into your mind is keeping the shares or the funds that you own as collateral to the loan that you wish to have.
However, the amount of the fund and the loan that you want should be either of the same value or maybe lesser.
Click Here: How to invest money in Share Market in India
10. Loan against insurance plans
This can happen only if your insurance is eligible to be converted into a loan then only it is effective or less you will have to wait for a time period of three years to make it effective to be converted into a loan.
With so many options available you can always go for the one which suits you the most, however I have seen that there are certain people who get scared on if it is safe for them to take loan from the Bank. Well, it is right to think of such a situation, however, there is no need to be scared upon it you can blindly go on with the decision of taking loan and buying whatever you wish to have in your cart. Just make sure that whatever documents you sign you read them carefully and in case you are not able to understand any of the point mentioned within the do ask. I hope now it’s clear to you what are some different types of bank loan in India.