Personal Loan

A personal loan is a loan, borrowed from a fund lending institution like a bank, with an unspecified purpose. This amount can be used by the borrower at their discretion, such as for a vacation, a wedding, a home renovation, etc.

A personal loan also requires a mortgage. It can be secured against anything of value, a shop, a home, or a car, which if the case of default in repayment, the lender can seize to recover his/her losses. Likely to this, many people thus opt for an unsecured loan without collateral.

The net amount of the loan to be repaid by the lower depends upon two factors; interest rate and the loan term. With collaterals attached, secured loans stoop for a lower interest rate than an unsecured loan which has a high-risk factor. Also, an impeccable credit record is needed to apply.

Car Loan

A car loan is a type of loan that is secured against the Car you want to purchase i.e., the purchased car itself serves as the collateral for the loan. But if you commit a default on your repayments, the lender can seize your car. The loan is paid in equal fixed installments over a period of time, and just like a mortgage, the loan lender retains ownership of the car till the final payment of the loan.

Considering that the lender has financial control over the car and the loan is secured, then the debt is at a lower risk, which significantly reduces the rate of interest for the borrower. In car loans, interest rates remain fixed, so borrowers are not subjected to the increases which is generally the case with unsecured personal loans.

Car loans usually have a lower interest rate, are easier to obtain even if you have a mediocre credit history and they are a convenient finance solution. But your possession of the car hangs in balance until the final repayment is made and a considerable upfront deposit is required to secure the loan.

Mostly, car loans have a fixed period of repayment such as 36, 48, 60, or 72 months and like in the case of a personal loan, the shorter the term of repayment, the higher the monthly repayment. Less-than-average credit history is alright with the lenders. The interest rate or borrowing amount is more dictated by the price of the car rather than the credit history.

Vehicle Car

Vehicle loans are the type of unsecured loans offered to borrowers that are usually individuals, trusts, partnership firms, organizations, etc., for the purchase of vehicles for personal, commercial, or business purposes. Vehicle loans are also availed by those who are involved in the business of mass transit. A vehicle loan can be used to purchase bikes, cars, buses, trucks, tippers, tankers, light and small vehicles, etc.

As previously stated, vehicle loans are available to those whose needs fund the purchase of the vehicle for personal, commercial, or business purposes. The application process for the vehicle loan is quick, hassle-free, and requires fewer documents and paperwork.

If the borrower’s profile is lucrative enough to match the criteria put forward by the lenders, the chances to get a vehicle loan are at a low interest. Also, the processing time for the vehicle loan is fast because of easy documentation and approval. Banks provide vehicle loans at affordable rates of interest without the want of any secured debt. Banks, in case of providing vehicle loans, assign a personal relationship manager for the loan process right from start till procurement of the vehicle. The personal relationship manager will do all documentation on the borrower’s behalf and address every issue related to the loan. After the successful submission of documents, the loan amount will be disbursed to the borrower within seven working days.

Home Loan

Home loans are a type of secured credit loan that allows borrowers to purchase and/or construct the home of his/her dreams. There are all sorts of house loans offered in India that are mentioned below:

• If you want to purchase land to build your new house, you'll need land purchase financing.

• If the construction of the house is what you are seeking, then you need construction financing for the house.

• If you want to transfer the remaining balance of the existing mortgage to a lower-interest loan, then you can opt for a balance transfer on your home loan.

• An add-on loan means you want to raise that fund to utilize it to renovate your existing home or to opt for the most up-to-date interior design you seek for your new home.

In case of purchasing a new property, the lender will ask for a down payment of at least 10%-20% of the property's worth. Banks list out the eligibility criteria for home loans. Primarily, banks look at your credit history to understand your repayment habits. A preferred credit score is 750 and above.

Some other important factors that are taken into account by the banks are the age of the borrower, your employment details, your minimum annual salary, collateral security, margin requirements, and your residency status, whether you are a resident of  India or an NRI.

Gold Loan

The gold loan, or a loan against gold, is a type of secured loan that a borrower takes from a lender in place of gold ornaments and gold jewelry possessed by the borrower. The loan amount sanctioned to you is a certain percentage of the gold’s value. The borrower can repay it through monthly installments after which they can get the gold articles back.

To its advantage, the gold loan has no restrictions on its end use, unlike the other types of secure loans such as home or car loans.

So it is a great way to meet your sudden monetary requirements of yours like a wedding, a family vacation, or a child’s education. Fortunately, many of the private and nationalized banks in the country along with NBFCs (Non-Banking Financial Companies) offer gold loans at affordable interest rates.

The process of gold loans, like many other secured loans, is similar.

• Firstly, the credit borrower takes his gold articles to the lender along with the required set of documents.

• The lender then evaluates the gold articles and verifies the submitted documents. 

• After the successful evaluation, the lender sanctions the loan amount to the borrower. 

• The borrower then, in accordance with the loan agreement, pays the principal amount along with the interest amount in monthly loan repayment transactions and then finally gets his/her gold articles back.