Loans are a great way to get the cash needed to finance your needs. As long as you have a plan that is reliable to pay it off you have many options at your corner.
Factors to consider while taking a loan:
- The debt-to-income ratio – You should be earning enough to pay off the monthly loan, along with personal expenses.
- Credit score and credit history, which will help obtain a loan in very less time.
- Annual Income and Expenses
- Payouts of debts on a monthly basis
- Possessions and liabilities
- Employer’s contact information
- The monetary value of your collateral.
- The amount of the initial deposit.
- Liquid assets are those that are easily liquidated
- Duration of the loan.
Documents required for taking a loan:
- Passport, driver’s license, voter’s ID, and PAN card are all acceptable forms of identification (any one)
- Proof of Address or Aadhaar card
- Leave and License Agreement / Utility Bill (during the last three months) / Passport (any one).
- Financial statements over the previous three months (where salary/income is deposited).
- Pay receipts for the previous three months
- Two photographs (passport size)
Types of Loans:
So, let’s have a look on various kinds of loans available in the market:
Personal Loan:
Basically you can go for a personal loan for any kind of normal liquidity issue. These loans are unsecured; and can be used for any personal purpose like for purchasing a TV set or for renovating your home. The application for this kind of loan is 1 or 2 pages. The lender will ask for a few documents like proof of income, proof of assets etc. You must possess sufficient assets to pay off the loan and the rate of interest on such loans could be on the higher side. The repayment period is short on such loans. If you brought a higher amount then you have to pay a higher amount as installments, make sure you are prepared for that.
The following are the self-employed home loan criteria that must be met:
Citizenship: Indian
Age: 21 years to 67 years for self-employed
Employment position: A working individual with a monthly earning of Rs. 22,000 or above.
A CIBIL score of 750 or higher is required.
What are the different types of Personal loans?
Personal loans could be applied for many different things. The most common types of personal loans are listed below.
- Marriage loan: Rather than emptying your resources for wedding ceremonies or your special event, apply for a personal loan for weddings. It is used to cover all special occasion expenses and repay the money quickly.
- House renovation loan: This personal loan for home maintenance assists you in additional payments of upkeep, restoration, reconstruction, refurnishing, decorating, and other property infrastructure upgrades.
- Travel loan: Use a personal loan for traveling to finance family excursions and holiday packages in India or overseas.
- Medical loan: This loan, which has swift clearance and inexpensive personal loan rate of interest, can come in handy during medical situations.
- Debt consolidation loan: Combine all of your previous debts into a single loan to effectively monitor your monthly payments. To calculate and schedule repayment, use our Personal Loan EMI Calculator.
- University education loan: In addition to college tuition, a personal loan for higher education can help you pay other sections of your studies in India or internationally, such as housing, transportation, and school expenses.
- Basic personal loan this loan is ideal if you require any additional finances for a special occasion or for your kid’s schooling.
Home Loans:
These loans are dedicated to cater the need of housing. You can use the money received in order to purchase a flat/house, construct a new house, to renovate your existing house or to purchase a plot of land to construct a new home. The tenure for paying off these loans typically range from 20 to 30 years. In India the rate of interest on these loans is around 7%-10% depending on banks. In this case the ownership of property remains with the lender until the borrower pays off the loan completely.
The following are the self-employed home loan criteria that must be met:
Citizenship: Indian
Age: 25 years to 70 years for self-employed
Employment position: At least 5 years of business operations in existing business.
A CIBIL score of 750 or better is required.
What are the different types of Personal loans?
Personal loans could be applied for many different things. The most common types of personal loans are listed below.
- Home loan balance transfer: With a house loan balance transfer, you can convert an existing home loan from the current bank’s loan to another bank.
- Top-up loan: In contrast to your home loan, get a top-up loan and use the high sum for special events, emergency medical treatments, education fees, or whatever else you want.
- Pradhan Mantri Awas Yojana
- Joint home loans: A joint home loan with a partner, relative, or parents can make buying a home more reasonable. The co-applicants are jointly liable for installments in this case.
- Women’s home loan: Combine all of your previous debts into a single loan to effectively monitor your monthly payments. To calculate and schedule repayment, use our Personal Loan EMI Calculator.
- University education loan: A women’s home loan provides abundant financing at a reasonable rate, allowing women to become self-sufficient householders and diversify their assets effectively.
- Home construction loan:Like the term indicates, a home construction loan is designed for people who are building a house on their own property. It also comes with a fund to cover the expense of refurbishing after the construction is finished.
Credit Card Loans:
Banks provide loans on credit cards for a shorter time period. You need to fill a simple application form issued by the in order to get a credit card. You can also apply online via the website of the particular issuer that you chose to apply for. Credit cards are accepted everywhere and you can also avail decent discounts on credit cards offered by some issuer. However there are some pitfalls of using credit cards, if not wisely.
The following are the self-employed home loan criteria that must be met:
Citizenship: Indian
Age: 25 years to 65 years
Employment position: A steady source of income
A CIBIL score of 750 or better is required.
What are the different types of credit card loans?
- Travel credit card: Special offers on travel packages, train and bus tickets, taxi services, and more are available with travel credit cards. Each transaction earns you bonus points. You can use your bonus points to book further trips. Using travel credit cards, you may get unrestricted access to VIP airport lounges, get cheap flight tickets, etc.
- Fuel credit card: Reduce your overall commuting expenditures with a fuel credit card and take advantage of fuel surcharge waivers all year to conserve money on fuel.
- Reward credit card: On selected payments and transactions, this credit card offers expedited bonus points. Additional points can be redeemed for subsequent deals and offers or used to lower your current credit card fees.
Vehicle Loan:
These loans are meant to finance purchase of vehicles. It could be a two wheeler or a four wheeler, a used vehicle or a new one. The amount of loan will be determined by the lender on the basis of on road price of the vehicle. The lender will judge your repayment ability on the basis of your credit report, if any. You can enjoy possession of the vehicle whereas ownership of the asset will remain with the lender until you repay the whole amount.
What are the different types of credit card loans?
- New Car Loan: A new car loan can be used to buy a new car, as the term implies. Banks provide new car loans with interest rates ranging from 9 to 14 % per year and loan periods ranging from one to seven years.
- Used Vehicle Loan: Banks and non-bank financial institutions (NBFCs) provide used car loans equal to 80%-85% of the car’s value at a rate of 12-18% p.a. Pre-owned or old cars which is less than 5 years old can be purchased with a used car loan.
- Loan against Car: Anyone might use his or their old car as collateral to get enough money to buy a new vehicle. This is referred to as a Loan Against Car.
Education Loan:
These loans are offered to aid education especially for professional programmes. It could be availed for an undergraduate, postgraduate, or any other diploma or certification. Depending on the lender it will cover the basic course fees, exam fees, accommodation fees or any other miscellaneous fees. These loans could be used to finance domestic as well as international courses. The amount of loan will be directly deposited to the bank account of the educational institution.
The following are the Education Loan criteria that must be met:
Citizenship: Indian
Age: 18 years to 35 years for individuals
Good Academic Record
Pursuing graduate/postgraduate degree or a PG diploma.
For salaried individuals: Age: 28-60 years
Employment: An individual working in any MNC, private or public job earning Rs. 20,000 or above.
What are the different types of education loans?
- Local Education Loan: This loan is available to students who choose to obtain their education in India. Only if the student is accepted into an Indian academic organization and fulfills all loan company requirements would the loan be authorized.
- International Education Loans: These loans enable students to pursue their dreams of studying in a university abroad. Only individuals who meet the qualifying requirements are eligible for the loan, which includes transportation, accommodation, and education costs for individuals who intend to study overseas.
- Undergraduate and Postgraduate Loan: This type of loan can help students pursue and complete their college degree and get a decent job based on their education.
- Loans for Career Development: Many individuals who have worked in office jobs for some years decide to take a break and enroll in specialized training and education to boost their economic opportunities. Such people would work hard to gain admission to reputable business and specialized colleges in order to improve their abilities and develop a successful career.
Consumer Durable Loan:
As the name spells out these loans are provided to finance purchase of a consumer durable. Whether you want to purchase a double door refrigerator or an HD TV set you will surely get a loan. These types of loans do not require thorough documentation and the loan amount could range from Rs.5, 000 to Rs.5, 00, 000. The interest rate for such loans varies depending on the lender and starts from 0% onwards.
The following are the Education Loan criteria that must be met:
Citizenship: Indian
Age: Minimum 21 years and Maximum 65 years
Minimum Monthly Income: Rs. 15,000
For Self-employed Professionals: Minimum Income: Rs. 1.5 lakh
What are the different types of Consumer Durable loans?
- Fixed-rate consumer durable loan: Fixed-rate consumer durable loans are the most common type of loan issued to applicants. The rate of interest on such consumer loans remains constant all through the loan period.
- Variable-rate consumer durable loan: A variable-rate consumer durable loan has a rate of interest that fluctuates with market interest values. Your interest payments will fluctuate, and the interest rate on such loans is normally limited in terms of how low or high it could be.
- Secured consumer durable loans: Secured loans are ones that are protected against resources as collateral. In India, secured consumer loans typically require the hypothecation of the object being bought.
Other Loans:
Apart from the above loans banks also provide loans for agricultural, business, business loan against property, gold loans and other purposes.
