TYPES OF BANK LOANS IN INDIA

Proper knowledge of the various types of loans offered by the banks of India can be extremely beneficial. It allows you to choose your bank sensibly and make an informed financial decision. Make My Money can help guide you through the process of taking out loans and availing loans which suit your requirements and eligibility.

Broadly, the many subcategories of loans can be classified in any one of the following two categories-

  • SECURED LOANS- To obtain this type of loan, you’ll need to have a financial asset which you can provide as collateral to the bank. Usually, the said asset will be taken over by the bank if the borrower fails to repay the amount loaned, along with the interest in time.
  • UNSECURED LOANS- In this type of loan, there is no need for collateral backing while taking out the loan. However, the amount of interest lain on the borrowed money can be much higher than in a secured loan. This makes up for the off chance that the bank fails to collect it’s money back.

The many subcategories of loans are as follows-

  • Home Loan- This is one of the most commonly utilized loans provided by the banks of India. It enables you to buy a home, completed or under construction. This is a secured loan, which requires you to provide the bank with collateral. The interest rate in this type of loan is low to moderate. Make my Money offers from 100% to 200% in registry values of Home loans.
  • Business loans- These loans are a part of Unsecured loans. Running a business can be difficult, and often, while starting off, people are low on funds. To improve working capital and expand the business, the loan becomes a necessity for some. Since it is an unsecured loan, the interest rate can be high, in which case, Make My Money saves you a substantial amount of interest by doing balance transfers at lower rates.
  • Loan against property – this type of loan goes in the secured loan category. It is necessary for the person taking out the loan to put a property owned by them to the bank as collateral. This allows the bank to confiscate the property in the event of non-repayment of the loan. There is a fixed income criterion imposed by the banks, which you will have to fulfill in order to avail the loan. Make  My Money can help you by providing customized options, in case you do not fulfill the criteria imposed by the bank of your choice. It will match you to the bank which can provide you with a loan which meets your financial needs.
  • Personal Loan- This type of loan is a part of Unsecured Loans. When you are in the need of cash for personal causes like a wedding, home appliances or a family vacation, you can apply for a personal loan. You are not obliged to give the bank a reason to obtain a personal loan. The amount of interest in this type of loan can be varied depending on your income.
  • Auto Loan- These type of loans are required for purchase of vehicles. This is a Secured Loan. As such, the loan can be obtained with the vehicle as security. While the bank offers auto loans, car dealerships may also offer their loans. In the case of failure of payment of EMI on time, the vehicle is likely to be confiscated.

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