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Types of Loans You Need to Understand
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Loans can be in many forms, even borrowing some money from our friends is also a kind of a loan. Loans can be utilized for various things in today’s world as they play a very important role in one's well maintained financial lifestyle. Loan agreements can come in all structures, differing from basic promissory notes among friends and family members to increasingly complex advances like home loans, car loans, payday, and student loans. So today we are here to explain to you about some different types of loans you can opt for.
Education Loans
Collateral: Differs From Lender to Lender
Interest: 10 to 15%
Points to Note:
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- Longer repay intervals
- Many Tax Benefits
- Higher Interest rates
Gold Loans
Collateral: Physical Gold
Interest: 11 to 14%
Points to Note:
- Faster loan sanctions.
- Not many documents required for the loan.
- Your gold holding may be sold off by the lender if the loan is not repaid in the decided time interval.
Business Loans
Collateral: According to Your Loan Recruitment
Interest: 11 to 16%
Points to Note:
- No collateral required if your business is doing well.
- You can repay in longer time intervals.
- Slightly high interest rates.
Car or Vehicle Loans
Collateral: On Banks Trust, Income Proof, Credit Score
Interest: 10 to 12%
Points to Note:
- Lower Interest Rates
- Longer repayment intervals
- Tax Benefits
Personal Loans
Collateral: On Banks Trust, Income Proof, Credit Score
Interest: 13 to 27%
Points to Note:
- Loans are disbursed quickly but need a formal application.
- Given only to the salaried, self-employed or professionals.
- Personal Loans are costly.
Home Loans
Collateral: Physical property
Interest: 8 to 12%
Points to Note:
- You can avail bigger loan if your income level is high.
- Installments can be Flexible
- Many Tax Benefits
Loans Against Car
Collateral: Your Vehicle
Interest: 12 to 16%
Points to Note:
- If your car has a good resale value, you can get a bigger loan.
- Banks don't approve vehicles that are more than 5 years old.
Loans From the Unorganized Sector
Collateral: Differs From Lender to Lender
Interest: 22 to 27%
Points to Note:
- Very Difficult to Pay
- Interest and terms are beyond limits
Loans Against Property
Collateral: Physical Property
Interest: 10 to 15%
Points to Note:
- Documentation are same just like a home loan
- Less Processing Time
Top up Home Loans
Collateral: Existing Home Loan
Interest: 10 to 12%
Points to Note:
- Lower Interest Rates
- Not Many Documents Required
- You can repay it in longer time if you have a good credit score
Scroll Down For More: Understanding Credit Risks And Benefits
