Loan: Banks and financial institutions give all kinds of loans to provide financial assistance to the people. The loan is a facility in which individuals or organizations can borrow a fixed amount and have to repay it within the stipulated time including interest. Loans found in India are distributed in 2 categories. The first is a secured loan and the second unusable loan.
Secured loans
In a secured loan, the borrower has to mortgage his own property such as house, car, gold etc. These loans have low interest rate and the loan amount is higher.
Home loan is taken to buy a house, in which the house purchased is mortgaged. This loan is of a period of 15 to 30 years. The interest rate ranges from about 8.40% to 15%.
This loan is taken to buy a car, bike or other car. Usually a loan is available up to 85% of the ex-showroom price of the vehicle. The interest rate is low and the period of repayment will be flexible.
Gold loan
This loan is taken by pledging gold jewelery. Its interest rate is 8% to 18% annually and is charged for a low period.
Loan in lieu of security
They can be taken loans without selling financial assets like mutual funds, stocks, insurance policys. According to the value of the fund, a loan can be received from 65% to 85%.
Loan Against Property (LAP)
This loan is taken by mortgaging its residential and commercial property. The interest rate can range from 8.40% to 12.50%. It can be used in education, business or other needs.
Unsecured Loans
This type of loan does not have to mortgage any accessories. This loan is given on the basis of credit score, but its interest rate is higher than other loans.
Personal loan
It can be used for personal education like wedding, travel, health and education. The interest rate ranges from 8% to 15%.
Education loan
This loan is taken for higher education, which cover fees, hostels, books etc. It also features a moratorium period and the interest rate can range from 8% to 16%.
Credit card loan
Those who already have a credit card can take a loan based on their credit limit. Its interest rate is quite high, which in some cases can also go up to 53% annually.
Short-term business loan
This loan is taken for the needs of small businessmen such as working capital, machinery etc. This loan is found quickly and it does not require property.
Flexi loan
This is an overdraft facility, in which you get a credit limit. You can withdraw money as needed. Interest is only on the amount used.
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