Loan Products from Banks

Credit can be used for various things in today's world. With this you can finance a business start-up or buy equipment for your newly acquired home. Let's talk about the different types of loans available in the market and their specific features that make these loans useful. to the customers. Various types of loans are available in India, which are classified into two factors depending on their purpose:

Secured Loans 

Unsecured Loans 

Secured Loans Secured loans  are those where you have to pledge an asset as collateral for the money you borrow from the lender. That way, if you are unable to repay the loan, the lender still has somethingmeans money back. The interest rate on secured loans tends to be lower  compared to unsecured loans. 

Home Loan – If you are looking to buy a home, applying for a home loan can go a long way.It offers financial support and helps you buy the house for you and your loved ones. These loans usually have longer terms (20  to 30 years). The rates offered by some of the major banks in India. Your creditworthiness will be checked before the lender approves the loan application. If you have  good credit, chances are you'll benefit from lower interest rates on your home loan.Mortgage loans are mainly taken out for the purchase of new houses. However, these loans can also be used for home renovations, home extensions,  land purchases, houses under construction, etc. 

Loan Against Property (LAP) A loan against property is one of the most common forms of a secured loan.You can mortgage any residential, commercial, or industrial property to draw on the funds you need. The loan amount paid out corresponds to a certain percentage of the property value and varies depending on the lender. While some lenders may offer an amount as high as 5060% of the property's value, others may offer an offeran amount of almost 80%. A home equity loan  helps you unlock the latent value of your assets and can be used to further personal life goals such as higher education for children or marriage. Businesses use a loan against the property for business expansion, R&D, and product development, among other things.

Gold Loan – A gold loan can be used to raise cash to meet planned or urgent financial needs like business expansion, education, medical emergencies, farming expenses, etc. A loan against gold is a secured loan where gold is placed as security or collateral against a loan amount equal to the market value per gram  of gold on the date the gold is pledged. Any other metals, gems or stones found in the jewelry are not counted in determining the  gold loan value.

Unsecured loans are loans that do not require collateral. The lender will give you the money based on previous connections, your credit score and history. Therefore, you must have  good credit  to take advantage of themLoan. Unsecured loans usually have a higher interest rate  due to the lack of collateral. 

Personal Loans: Most banks offer personal loans to their customers and the money can be used for any expenses, e.g. B. to pay a bill or to buy a new TV. , these loans are unsecured loans.The lender or  bank will require certain documents such as proof of assets, proof of income, etc. before approving the amount of the personal loan. The borrower must have sufficient assets or income to repay the loan. For personal loans, the application is 1 or 2 pages long. The borrower learns about the rejection or approval of the loan within a few days.Keep in mind that the interest rate  associated with these loans can be higher. The term of these loans is not that long. So if you borrow a large amount, you may find it  difficult  to pay it back without planning your finances properly. 

Small Business Loans:Small business loans are loans made to small  and medium-sized businesses to meet various business needs. These loans can be used for a variety of purposes that help  the business grow. Pay employee salaries, pay marketing expenses, pay off business debts, settle administrative expenses, or even  open a new store or acquire a franchise. 

Education Loan – An education loan is  specifically designed to fund educational needs for school or college.Depending on the lender, it covers basic course fees, exam fees, accommodation fees and other various costs. The student is the borrower and any other close relative is the co-applicant, e.g. a parent, grandparent, spouse or sibling. It can be used for courses in India or abroad. It can be completed part-time or full-time for a  variety of recognized courses. They include vocational courses as well as bachelor and postgraduate courses.