Bank Loans in India

Can you tell me in detail about different types of Loans offered in India by different nationalized and Private Banks as I want to apply for a loan for my children?

A Loan is an arrangement in which a borrower takes money from a lender or a financial institution and promises to return it within a fixed period of time and at a fixed rate of interest, which is determined at the time the loan is granted.

In most of the cases, a loan is returned in fixed installments and each installment is a fixed amount of money. There are various types of loans. Some of them can be classified as follows:

Home Loan-

Home loan as name suggest is the loan against buying property.

Every individual currently have dreams to have their own home.

To make affordable best option is home loan. Again there are sub-categories of home loans which are as below.

Home loan for residents
Loans for repairs and extension
Land purchase loan
Top-up loans
Loan for Earnest Money Deposits (EMD)
Reverse Mortgage Loans
Loan against property

Personal Loan:

Personal loans are meant to meet the personal needs of an individual.

One can use this money for anything they want.

One can buy some expensive gadgets or can also keep this money for going on a holiday with family.

The rate of interest of this type of loan although is comparatively higher but it still feels great to have the money in advance.

Education Loan:

Banks also provide education loans to their customers.

It provides better study opportunities for the students who are financially backward.

One who wants to pursue higher studies from a reputed institution can apply for loan in any bank in India.

Once the students get placed, they themselves can pay back the money from their payment. Hence, now students who are poor can also opt for higher degrees.

Car Loan or Vehicle Loan:

Vehicle loan or to be more specific car loans fulfills your dream of having a car or a bike. It is offered by almost all the banks in India.

It is a secured loan hence if the installments are not paid on time the lender has the right to take back the vehicle. If one gets the loan on time the installments should also be paid regularly.

Gold Loan:

Among all types of loans in India, the easiest and fastest one to get is a gold loan. Earlier when gold rates were increasing at an exponential rate, this loan was the most popular.

Although now, when the rates are decreasing the gold loan companies are facing huge losses.

Agricultural Loans:

There are different types of loans offered by banks for the farmers which can help them in the agriculture practices.

One can buy the seeds, insecticides, tractors and other equipment needed for agriculture from the money they get from the loan and can pay the money back once their crops are sold.

Loan against Shares or Mutual Funds

Few lenders offer loan against investment value of shares or mutual funds. But you will not get more value from this. Reason is, both the investments (if mutual fund is of equity oriented) then fluctuation in values will be high. Hence to protect their loan amount usually lenders offer fewer loans.

Loan from Unrecognized Sector

This is one of the easiest but costliest ways of fulfilling financial dream. Usually interest rate will be in the range of 20%-30% but you can get it immediately. Such type of loans is useful who are running out of time and not have any source also to fund their financial requirements. But looking at this option is costly affair. Hence it is highly advisable to avoid such funding.

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Answered By StudyChaCha Member