The different types of loans available in India
A loan is a monetary fund borrowed from a financial institution with the promise to repay the principal amount as well as its interest. The interest on the loan is generally a function of the type of loan and the length of the loan taken out. Ziploan offers affordable Stand-up India loans.
Loans could be obtained for various reasons, diversifying from personal needs to professional needs. Indians often take out loans. Thus, to meet this need for financial assistance, institutions have set up various loans. Some of them are as follows:
On the general ranking, the different types of loans in India are categorized into two.
Secured loan: In the case of a secured loan, the borrower has to pledge an asset for the value of the money. It is only after that that the loan will be granted.
If there comes a situation where you cannot repay the loan, the lender will have full authority to end and own the promised prosperity.
Some of the common types of secured loans are as follows:
1) Home loan:
it is one of the most common loans in India. This loan will help citizens to obtain housing. Some of the common goals of a home loan are to:
- Purchase of land: In this case, the mortgage is used to purchase the construction plans for the house.
- Residential construction: In this case, the land is already existing. But for the need to build a house, the loan was taken out.
- Balance transfer: A home loan already exists in this condition, but the amount is transferred to another loan with minimal interest.
2) Loan on insurance policies:
People who have benefited from an insurance policy can also apply for a loan on the basis of the insurance policy they have taken out. But there are some restrictions on these loans.
Only loans with a repayment guarantee and with endowment characteristics can be sanctioned. The other essential thing to focus on is that the insurance policy loan must also have a maturity date.
This restriction prevents many people from availing this loan because you cannot take out the loan with term insurance. Term insurance is one of the most commonly purchased insurance policies in the country. Term insurance has no benefit when it expires.
No insurance policy will be taken out for temporary insurance. The other common insurance policy that is neglected in this type of loan is unit-linked insurance.
In this type of insurance, reimbursement is only based on market conditions. It will be very unpredictable to issue a loan on such a fragile basis. Thus, unit-linked insurance is not eligible for the loan either.
3) Gold loan:
The gold loan is another common type of loan visible in every Indian household. This loan is contracted on the gold asset. The main reason why this is common is that gold lending has a very flexible interest rate in India. This makes borrowing and lending money easier by noting the insurance rates.
In a gold loan, it is necessary to pledge gold jewelry. Based on the valuation of gold, the loan amount is usually an issue. Compared to other types of loans, a gold loan usually has a very short repayment term.
It is only based on the borrower’s short term needs and also has flexible interest rates. Upon full repayment of the loan amount and its interest, the gold pledged as collateral will be returned.
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1) Education loan:
The most common loan borrowed by the youngest in society is a student loan. It is thanks to this loan that most people pursue their higher education. A student loan often covers expenses related to education costs like tuition and others like accommodation, transportation and other similar costs.
It is usually the students themselves who form education loans for their personal needs. But often parents of students or siblings can vouch as applicants. The student loan can be taken out for full-time courses as well as for part-time courses.
Some banks also offer student loans for professional courses. There is an interest rate added to the loan, and the student must repay it. But the repayment period for a student loan does not begin until after the end of the academic course.
The educational loan has the particularity of the moratorium. Depending on this, the borrower can decide not to repay any amount to the institution until 12 months after the course ends. This is an added benefit because students have enough time to find a job after their studies to repay their loans.
2) Vehicle loan:
It is a kind of loan provided for the purchase of vehicles for one person. The vehicle can be a new or even a used vehicle. Depending on their preferences and priorities, the decision is made. Vehicle loans can be used for both two-wheelers and four-wheelers.
Although the vehicle loan is very flexible, it is also subject to certain restrictions.
One of these restrictions is that the financial condition of the borrower plays a vital role in obtaining a car loan. Credit scores along with debt to income ratio, loan term are taken into consideration. PM Svanidhi can be used by Zip loan.
3) Personal loan:
The personal loan is also highly regarded for its availability of instant liquidity. Yet the main drawback is that a person is under the category of an unsecured loan. This gives it a higher rate of interest than other secured loans. Ziploan offers affordable loans for MSMEs.
Some of the goals for obtaining a personal loan are as follows:
- Manage expenses
- Pay for vacation
- Home renovation financing
- Financing the education of the child
- Consolidate all your debts
Besides the loans mentioned above, there are also other types of loans such as Flexi Loans, Short Term Business Loans, Standup Loans, MSME Loans, and Stocks among others.
Depending on their needs and abilities, you can take out a loan. For more details, contact Ziploan at 011-4310-9577 or email [email protected]
Frequently Asked Questions
Here are the types of loans available in India:
1) Personal loans
2) Credit card loans
3) Home loans
4) Auto loans
5) Two-wheeler loans
6) Small business loans
7) Payday loans
Here are the five best government loan programs in India:
1- MSME loan in 59 minutes
2- Pradhan Mantri MUDRA Yojana (PMMY)
3- Credit Guarantee Fund System for Micro and Small Businesses (CGFMSE)
4- National Society of Small Industries (NSIC)
5- Credit Linked Capital Grant Scheme (CLCSS)
A government guaranteed loan is a government subsidized loan, also known as a direct federal loan, that protects lenders against defaults, thereby allowing lenders to offer potential borrowers higher interest rates. low.
A conventional loan is a mortgage loan that is not guaranteed by a government agency. Compliant conventional loans follow the lending rules set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).