Understanding Different Types of Bank Loans in India

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LOANS AND DIFFERENT TYPES OF BANK LOANS IN INDIA
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A loan is when you receive money from a friend,
bank or financial institution in exchange for
future repayment of the principal and interest.
They can be unsecured, like a personal loan or
cash advance loan, or they may be secured, like a
mortgage or home equity line.A loan may be for
a specific, one-time amount or can be available
as an open-ended line of credit up to a specified
limit or ceiling amount.
DEFINITION OF LOAN
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Difference between Secured Unsecured Loan

• SECURED LOANS

• UNSECURED LOANS

• As the name suggests, secured loans are the one
  that keeps an asset as a security to assure that
  the loan is repaid. In case of any default, the
  bank is liable to keep the asset, kept as
  security at the time of the loan, and get the
  amount back.
• Types of Secured Loans
• Car Loan
• Mortgage Loan
• Home Loan

• Unsecured loans are the loans that no collateral
  or security and offered purely on the basis of
  credit score and credit history of the borrower.
  Lenders find unsecured loans unsafe as there is
  no collateral to recover the amount in case a
  borrower defaults the loan, therefore, unsecured
  loans are offered at higher interest rates.
• Types of Unsecured Loans
• Personal Loan
• Education Loan
• PayDay Loans
• Credit Card
• Signature Loan
• Peer to Peer Loans

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TYPES OF LOANS

• Marriage Loan
• Car Loan
• Two Wheeler Loan
• Travel Loan
• Loan Against Property
• Credit Line

• Personal Loan
• Cash Loan
• Business Loan
• Consumer Durable Loan
• Education/Student Loan
• Home Loan
• Medical Loan

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PERSONAL LOAN

• Personal loan is an unsecured amount of loan
  borrowed by an individual on the basis of various
  criteria. Personal loan depends on a level of
  income, CIBIL score, scope of repayment and
  history of employment.
• This loan serves the personal needs of an
  individual at the time of financial crunch. Upon
  the amount required by an individual, he/she can
  calculate the interest he has to pay monthly and
  estimate the instalment he/she has to take out.
• Personal loans take the least time in getting
  approved with minimal documentation since a
  person is in urgent need.

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CASHLOAN

• Cash loans are small assistance to an individual
  at the time of need. They are small amounts given
  on small tenure and get sudden approvals and
  disbursal to make the borrower feel at ease.
• Cash loans are usually taken by the individuals
  who do not maintain a bank balance but have the
  capacity to repay the amount in short duration.
• Cash loans offer small amounts that do not extend
  beyond a year. They are unsecured loans but banks
  give some means to ensure that the amount is
  repaid.

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BUSINESS LOAN

• Business loan is an amount offered to meet the
  objectives or immediate requirements of a
  business. This loan is given understanding the
  customer requirements, therefore, it is a
  customized deal between a lender and a borrower
  that is decided looking at the borrowers need.
• Business loans are subject to easy availability
  and can be availed by anyone but make sure YOU
  NEED IT ! 
• It is offered on minimum initiation charges and
  is usually an unsecured loan but there are some
  terms and conditions at the time of agreement
  that you need to abide with in order to get a
  smooth processing and a comfortable experience.

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CONSUMER DURABLE LOAN

• Consumer durable loan is an easy option to
  finance the household items like refrigerators,
  microwaves, washing machines, air conditioners,
  television, chimney, etc. it gets difficult to
  shed a huge amount at one go, therefore, such
  friendly options have been made available to the
  public to use it to their best to lead a
  luxurious as well as a stress free life.
• Most home appliances have become a necessity more
  than a luxury therefore every individual wish to
  possess the minimum possible to lead a
  comfortable life.
• However if someone cannot pay at one go, it is
  the best option to take a consumer durable loan
  that is favourable for a borrower and continue to
  pay easy EMIs.

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EDUCATION/STUDENT LOAN

• An education loan is a respite for the students
  whose ambitions purely rest on education. The
  students who are hardworking only know the value
  and the hard earned money they spent on it adds
  more value to their education.
• A student is a primary applicant and his/her
  caretaker, parents, guardian or guarantor can be
  co-applicant. The co-applicant has to take the
  responsibility to repay the loan amount.
• Education loan covers the entire fees of the
  course, examination fee, accommodation fee and
  all the other expenses associated with the course.

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HOMELOAN

• Home loan or housing loan is a certain amount of
  money borrowed by an individual to purchase a
  house or any piece of residential property for a
  specific time period. The amount is lent with
  some interest amount that has to be paid along
  with the principal amount.
• Once you clear your eligibility criteria, decide
  the type of home loan catering to your
  requirements. Here are some of the loans you can
  avail
• Loan for home purchase
• Loan for land purchase
• Loan for home construction
• Loan for home improvement, renovation or
  extension
• Joint Home loan
• Loan for stamp duty
• Home loan for Balance transfer
• Bridged loan

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MEDICALLOAN

• Extended under the category of personal loan,
  this loan is taken to fulfil the financial needs
  at the time of medical situation. If there is a
  sudden operation suggested by the doctor, some
  therapy or accidental situations, this loan can
  help you get away with finances.
• Avail the medical loans when the insurance cannot
  cover the expense. Insurance amount is generally
  not high as compared to the amount lent on loan.
  Be aware of the offers available in the market
  and in case of emergency, just get the loan
  easily.
• Medical loans are one of the most availed product
  in the market since it is user-friendly. 

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MARRIAGE LOAN

• Marriage loan has a lot of similarity with
  personal loans but stand true to their name as
  they are used for financing the marriage
  ceremony.
• Low EMIs therefore easy repayment
• Early loan approval, early disbursal
• Flexible duration of repayment
• Pre-payment option available
• Customised offers
• Interest rate varies from 10 to 20. The range
  is variable.
• Minimal extra charges
• No guarantor

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CAR LOAN

• Fulfil your needs by applying for an easy car
  loan and make your dream of owning a car come
  true. Just a few documents, verifications and
  background check can fetch you your dream car. 
• Either you want to purchase a new car or you want
  to purchase a second-hand car. Those are the two
  possible options. The third option that is
  offered by some of the banks is a loan against
  car where you need to mortgage your old car to
  the bank as collateral and take a loan against
  it.
• Loan amount, interest rate and duration of loan
  differ when you compare new cars to old cars. It
  is quite natural that new cars are expensive,
  therefore the car loans against them are also
  expensive.

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TWOWHEELERLOAN

• There are two major types of two-wheeler
  loans secured loan and unsecured loan. As the
  name suggests secured loans keep a security but
  are offered on lower interest rates. However, the
  unsecured loans do not keep a security but charge
  you higher at the same time considering safety
  for the amount offered. As a result, you end up
  paying more. Hence, the choice is yours which one
  to choose depending on your priority and
  requirement.
• Two-wheeler loans are the most customer friendly
  loan option available in the market that does not
  only help you to lead a hassle free life but also
  makes life easy for you and help manage your
  finances. 

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TRAVELLOAN

• Travel Loan also known as a holiday loan, it is
  personal loan offered to bear your travel
  expense.
• The entire amount is disbursed to the account to
  be used by the borrower at the time of need.
• Travel loans can be used anywhere. It caters to
  all travel related expenses. The amount gets
  disbursed in the account and it can be used as
  and when needed. Travel loans get easy approvals
  with a few documentation. The loan amount gets
  disbursed once the verification is complete.
• Travel loans are offered on low-interest rates
  but there are other factors that decide the
  interest rate. Usually, interest rates vary from
  11 to 20. Choose the best interest rates
  available.

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LOANAGAINSTPROPERTY

• Need money instantly for business or something
  personal, get a loan against property. Keep your
  property residential or commercial as a security
  and get a loan for the market price of your
  property. In the process, you can continue to
  stay in that property, it just serves as a
  collateral for the banks for giving loans on such
  big amounts. 
• When there is an emergency, a wedding, business
  requirement, medical emergency, etc. loan against
  property is an easy option available that is
  faster and easier.
• There are several charges over loan against
  property that an individual might not be aware of
  but it is advisable to know every extra amount
  charged to know the exact payment you are paying.

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CREDITLINE

• Credit line, also known as line of credit is a
  collective amount of money available to the
  borrower for use as per his requirements. The
  lending agency sets a limit as requested by the
  borrower. He/she can extract any amount up to the
  maximum limit set by the applicant.
• The most interesting feature about this kind of
  loan is that the borrower neither has to use the
  entire amount at once nor does he/she have to pay
  interest for the entire amount. The amount used
  by the borrower is only subject to interest.
• This loan is quite suitable for those who are not
  sure about their financial requirement but are in
  need now and then.
• It is a flexible loan that can be utilised when
  there is a sudden and an urgent need for
  finances, however, the amount needed is not
  fixed.

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