Different Types of Bank Loans in India

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Types OfBank Loans in India
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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.

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Categories of Loans
Categories of loans
Unsecured
Secured
Personal Loans/Purpose loans
Credit card
Car loan
Home loan
Education
.
Loan Against Property
Peer-to-Peer
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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 wont be
  able to seize any asset of borrower.
• It tends to have higher interest rates because of
  higher risk

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Different types of loans

• Personal Loans
• Business loans
• Car loan
• Home Loan
• Marriage Loan

• Education loan
• Payday loans
• Two wheeler loan
• Travel loan
• Consumer durable loan

• Cash loan
• Medical loan
• Loan against Property

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• Its 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

Car Loans
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• 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
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• 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.

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Personal Loans
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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.
Business loans
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It is kind of a purpose loan which falls under
unsecured loan category. Weddings in India 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.
Marriage loans
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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 India, loan for study in abroad,
executive MBA, etc.
Education loan
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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.
Loan against property
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A payday loan is a type of short-term
borrowing where a lender will extend high
interest credit based on a borrowers income and
credit profile. A payday loans principal is
typically a portion of a borrowers 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.
Payday loans
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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.
Consumer Durable Loan
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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..
Travel loan
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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.
Cash loan
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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.
Medical loan
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In todays fast moving world, two-wheelers are
common mans 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 doesnt affect borrowers
monthly budget. Some lenders dont take any
extra charges thus helping buyer to clear off
their debts faster.
Two-wheeler Loan
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