Do you know that there are more than 10 different loan products in India? Check out these top 8 Loans to find the right one that meets your specific financial requirements.
Did you know that there are several different types of loans other than home loans and personal loans? Very often borrowers are not aware of the various specialised loan products in the country. This makes them avail a loan that isn’t suited to their needs. The result? Steep interest rates and getting caught in the debt trap.
To avoid such costly financial mistakes, it’s essential to know about the different types of loans in India.
Here are the common loan products in India provided by leading financial institutions.
- Home Loans
One of the most popular and well-known types of loans in India, it helps you make your home dreams come true. With sky-rocketing land prices, it’s not possible to buy a property from one’s pocket. This is where a new home loan comes in.
It provides you with financial assistance for the following:
- Purchase of Land
- Purchase of a completed apartment/individual house/residential property
- Construction of a house
- Educational Loan
No one should be denied of a good education just because they don’t have the necessary funds for it. This is where an educational loan comes in. You can avail it to fund your higher education be it in the country or overseas. The repayment of the loan usually begins after you have completed the course and the interest for this loan is lower compared to other loan products in the market.
- Vehicle Loan
This one’s divided into two major types:
- Car Loan
- Two-wheeler Loan
Vehicle loans are often easy to avail when compared to other loan products. They don’t involve complicated checks and lengthy documentation, since it’s a secured loan. The lender of your loan has the right to possess your vehicle in the case of a non-repayment or delay in paying the EMIs.
- Gold Loans
In this loan, the borrower pledges his gold ornaments to receive the loan amount. The rate of interest of this loan is highly dependent on the prevailing gold rates. The lender has the right to auction off your gold ornaments in the case of default of loan payments. This is considered as one of the safest type of loans for financial institutions and other lenders.
- Personal Loan
As the name suggests, a personal loan is granted by financial institutions to individuals for their own uses. Here there’s no restriction on the usage of the loan amount. You can use it to go on a vacation, fund your child’s marriage, renovate your home or buy the latest Smartphone in the market. The choice is all yours.
- Business Loans
As the name implies, the amount you receive using this loan must be used only for enhancing your business. Some of the popular usages of the business loan amount are:
- Buying new equipment for your business
- Renting/Buying bigger office space
- Hiring new staff
- Loan Against Property
If you already own a property, irrespective of whether it’s a residential or a commercial one, you are eligible to avail this loan. Here, you pledge your property as security to receive the loan amount. Since, it’s a secured loan, the interest rates are lower and it’s quickly processed.
- Loan Against Bank FDs/Shares/Mutual Funds/Insurance Policies
In all these types of loans, you submit the particular document as security to avail the loan. All these loans are secured loans, meaning it’s easy to avail and be free of complicated checks and lengthy documentation.
Apart from these popular types of loan products there are several other specialised loans offered by various lenders. Make sure to check around and find the right loan product that is a perfect match to your financial requirements.