Types Of Loans by Banks: A loan is essentially an amount borrowed with a promise of return within a specific tenor. The lender sets a fixed rate of interest that you pay on the borrowed money. These days, loans can be used for various things like it can be used to finance a startup to buy appliances for your newly purchased home.
There are different types of loans by banks in India, and they are classified into two factors based o the purpose they used for i.e. secured loans & unsecured loans. Lets talk about the types of loans available in India and their specific characteristics that make these loans useful to the customers.
Different Types Of Loans by Banks in India
Here is the list of different types of loans by banks in India –
1. Home Loan
A home loan is a type of loan that provides you with the finance required to buy or construct of your dream home. Prime Minister Narendra Modi’s Pradhan Mantri Awas Yojana has given a major catalyst to home loans in India. One can apply for a home loan online in few steps. These loan come with longer tenures at least 20 to 30 years. There are some of the top banks in India that offered rates with their home loans start at 8.30%.
2. Personal Loan
A personal loan is one of the most popular types of loans by banks that offer to their customer. One can take this loan for their needs like education, marriage, health etc. The interest rate of personal loan is higher than secure loans. Before approving the personal loan amount, the bank needs certain documents such as income proof, proof of assets, etc. The borrower must have sufficient assets or income to repay the loan amount.
3. Education Loan
An education loans is a type of loan designed to help students pay for higher education and related fees, such as tuition, books and supplies, and living expenses. Students who have a dream to study abroad from prestigious institutions can take this loan. It can be taken for a full-time, part-time or vocational course along with graduation & post graduation courses in engineering, management and medicine. After completion of the course students can repay the loan amount.
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4. Small Business Loans
A Small Business Loans another types of loans by banks that are provided to small and medium scale business to meet various business requirements. It is a type of unsecured loans. These loans can be used for various purposes that help in business growth. This may include purchasing some equipment, purchasing inventory, paying off business debts, etc.
5. Gold Loans
A gold loan is a type of loan where the bank takes your gold as collateral for the loan tenure. The loan amount provided is a fixed percentage of gold, usually up to 80%, based on the current market price and quality of the gold. A gold loan is a short term needs and have a short repayment tenor as compared to home or property loans.
6. Agriculture Loan
Agriculture loan is one of the types of loans by banks where loans are provided to farmers to meet their daily or general agricultural needs. These loans can both short term or long term. They can be used to raise working capital for growing crops or buying agricultural equipment.
7. Vehicle Loan
A vehicle loan is given for buying either a new vehicle or a used one. It may be like a two or four-wheeler vehicle. Your credit score, ratio of debt to income, tenor of loan etc play an important role in determining the loan amount.
