Know All About Different Kinds of Bank Loans
Loans are the type of financial products that banks provide to their account holders. Car loans, education loans, personal loans, and other loans are available at very affordable interest rates. The application process to get this loan is very simple. Banks ask account holders about their income proof, asset proof before disbursing the loan amount. It is because banks want the security of the repayment of loans.
However, there are many of us who are unaware of loans in banking sector and its application process. For instance, if we talk about the personal loan, then the bank asks the loan borrower to fill a minimum of 2-3 pages application form, which includes all relevant details of the personal information.
What are All Types of Bank Loans Available?
1. Home Loans
Buying a dream house is what many of us aspire to. So, those who have regular monthly income take a home loan at very affordable interest rates. In the current scenario, between 6% to 7% of Home loan interests are there. Thus, it is a good opportunity to take a home loan. In this type of loan, there is no requirement of repaying it soon or in a hurry. Banks offer loan repayment tenure up to 20 to 30 years.
Remember that the credit score should be up to 750 is a good sign to take a home loan. The more is the credit score; the more is, the lower EMI for your home loan. It is not about only buying your dream home but also for home renovation and other home modification purposes.
2. Car Loans
The vehicle is the symbol of joy and happiness. That is why many banks offer car loans at a very low interest rate. The dream of owning a car is what many Indians aspire to. But, here also, the credit score plays a crucial role in making you eligible to avail of car loan offers. If your credit score is good and you do not have any default history in the past, then the bank is ready to provide you with loans.
In recent times, we witnessed very minimal down payments and low interest rates. It is a type of secured loan that attracts many car lovers. However, if someone fails to repay the installment, they may have to return the car and outstanding debt to the bank.
3. Education Loan
For higher education and pursuing university recognized courses, parents or students take an education loan. Today, education loans are available for overseas education and domestic educational courses. To apply for the same, the bank checks the borrower’s history, and if the borrower is a student, then parents have to be the co-applicant to borrow the loan.
In an education loan, a co-applicant is necessary whether the loan amount is for part time or full time courses. In India, banks provide education loans for vocational courses or undergraduate or postgraduate courses.
4. Gold Loan
No one knows when the financial constraints appear. In order to maintain the cash requirement, a gold loan is the best option to meet financial requirements like medical emergencies, education, personal expenses, and others. So, borrowers deposit the gold, and money lenders give the loan amount according to the international market price per gram of gold.
Remember, it is only about the gold, which does not include any other gems like stones or pearls. In this, gold acts like collateral which the borrower repays the gold loan.
A guarantee in taking the loan is the basic principle of securities in banking sector. That is why banks inspect every element of the borrower’s history and credit score report. So, which loan suits your financial parameter? Find out the best and avail of it!