There are so many needs that we have, and at times we need to have extra money to fulfill our dreams. Loans help you to resolve the problem of money. There are different types of loan available for a different type of requirements.
In some type of loans, you can even save on taxes to a certain limit. It is very important you take the right type of loan so that you can save on money.
By taking the right type of loan, you can save money by getting additional benefits for a particular category. Some loans have offers for students, professionals and so on. You can save money on interest rates by choosing to take the right type of loan.
Let’s take an example if you have a small loan requirement and you don’t want to break your savings. You can take a loan against your fixed deposits. This type of loans has less interest rate than the rates usually levied on personal loans. The net interest rate post adjusting the returns of a fixed deposit can be as low as 3-4% or 6%. Over a period of 3-5 years, there is a lot of money that will be saved.
Types of Loan:
This is a type of unsecured loan. Personal Loan can have high-interest rates. This type of loan is taken for personal need. Buying new products, furnishing house, or any particular need can be addressed through these loans. These loans have a longer tenure (duration). The duration to repay these loans can be from one year to five years. The common duration is for 3 years and 5 years.
The documents you need to provide for these type of loans are income/salary proof, residential proof, bank statement. The details required are for the past six months. Residence at a place should be ideally more than 3-5 years, but the requirement can be different for individual lenders.
The loan is easy to get, and the loan is disbursed in 4-7 days if the documents are in order. If you want to understand how the eligibility of the personal loan is taken into consideration you read our blogs for personal loans:
1. How to get a personal loan easily? Factors that matter to process a loan.
2. How much personal loan can I get? Important factors for a personal loan.
As the name suggests, these loans are only available for the purchase of a new or resale home. These are secured loans and the property that is purchased is a mortgage for the security of the lender. These loans can be of longer duration, and the repayment of loans can be adjusted for 30 years. The tenure depends on the individual to the individual lender. The common tenures are 20-30 years.
The interest rates for these loans can start as low as 8.35% but this depends on the regulations of the RBI and the interest rate might fluctuate. The loans that are bigger in amount (mostly above 40 Lakhs) the interest rates can be higher.
Mostly, all lenders have a mandatory insurance policy to be taken, keep that in mind while adjusting your finances.
These loans are taken for education purpose. Mostly, these loans are taken for students wanting to study abroad or students who are looking in for higher education in India. These loans do have facilities that help students to cover costs of travel, stay and other allied costs related to education. The interest rates and the payment options have the flexibility that would suit the needs of the students.
To apply for these loans, you need to have an invitation letter, all the other documents related to admission and prior education ready.
These are new-age loans for fast-growing India. These loans are only applicable to purchase the car. The loan limit could be up to 99% in some cases, depending on the financial papers from individual to individual. Mostly, 90% of the loan is provided for new cars and around 80% for resale cars.
Car loans are a secured type of loans. These loans are against the car. Nowadays there are many banks that offer a lot of offers for car loans, you can choose the best one that suits you.
Two Wheeler Loans:
Two wheelers have almost become a need of many these days. Two wheeler loans are easy to process. It requires minimal documentation. Banks process the loans in a week. This is a secured loan. The tenure for these loans is up to 3 years but can have a variety of options depending on the lender.
Loans against Fixed Deposits:
The loans against fixed deposits is a good option because the net interest on the loan is reduced. Usually, 80% of the fixed deposit can be given as a loan. The interest rate is higher than the fixed deposit interest.
This is a short term credit. If the credit card used wisely could help with many perks. But, it has its own cons that credit cards come with higher interest rates. The higher interest rates can be a burden to repay. Therefore, using these cards should be done precisely. You can check out for many offers that provide great returns. You should also check for the annual pricing of the credit cards before enrolling for one.
Gold loans are a secured type of loans. Banks process these loans in a day. The interest rates are lower than the personal loan rates. Around 80% of the gold amount according to current market rates, the loan can be processed.
Hope this provides you an introduction to different types of loan that you can avail in the market. The other types of loan are EMI free loans, loans against shares and stocks, loans against insurance, and loans that can be taken by mortgaging property.
If you have any queries, please comment. You can also find us on Facebook here