A loan is a monetary fund borrowed from a financial institution with the promise of returning the principal amount along with its interest. The loan’s interest is generally based on the type of loan and the period of the loan taken. Ziploan offers affordable Stand-up India loans.
One could obtain loans for various reasons, diversifying from personal needs to professional needs. Indians often take loans. Thus, to satisfy this need for financial aid, the institutions have arranged for varied loans. Some of them are as follows:
On the general classification, the different types of loans in India are categorized into two.
Secured loan: in the case of a secured loan, the borrower must pledge an asset for the value of the money. Only after doing so will the loan be provided.
If there comes a situation where you can’t pay the loan back, the loan lender will have complete authority to cease the pledged prosperity and own it.
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Some of the common types of secured loans are as follows:
1) Home loan:
it is one of the most commonly sourced loans in India. This loan will help the citizens to get a home for themselves. Some of the common purposes of a home loan are as follows:
- Land purchase: In this case, the home loan is used to purchase plans for constructing the house.
- Homebuilding: In this case, the land is already existing. But for the need for building a home, the loan has been taken.
- Balance transfer: A loan on the home already exists in this condition, but the amount is transferred to another loan with minimal interest.
2) Loan on insurance policies:
People who have availed of an insurance policy can also apply for a loan based on the insurance policy that they have taken. But there are certain restrictions on these loans.
Only loans that have a money-back guarantee and have endowment features qualify for sanctioning this loan. The other vital element to focus on is that the loan on insurance policy must also have a maturity period.
This restriction limits many people from availing of this loan as You can’t take the loan on term insurance. Term insurance is one of the most commonly taken insurance policies in the country. Term insurance fails to have any benefit upon its maturity.
There will be no insurance policy taken upon term insurance. The other common insurance policy which is neglected under this type of loan is the unit-link insurance.
In this kind of insurance, the money-back is solely based on the market condition. It will be highly unpredictable to issue a loan on such a fragile basis. Thus, unit-link insurance is also not qualified for the loan.
3) Gold loan:
The gold loan is yet another common type of loan visible in every Indian household. This loan is taken on the gold asset. The major reason for this being common is because the gold loan has a very flexible interest rate in India. This makes it easy for borrowing and lending money by noticing the insurance rates.
In a gold loan, there is a need to pledge gold jewellery as collateral. Based on the valuation of the gold, the loan amount is an issue generally. Compared to other types of loans, a gold loan generally has a very short repayment tenure.
It is solely based on short term needs of the borrower and also has flexible interest rates. Upon the full repayment of the loan amount and its interest, the pledged gold as collateral will be returned.
Unsecured loan:
1) Education loan:
The most common loan borrowed by the younger sector of society is an education loan. It is using this loan that most people pursue their higher studies. An educational loan often covers the expenses of education fees like tuition fees and others like accommodation, transportation, and similar other costs.
It is generally the students themselves who o train educational loans for their personal needs. But often, parents of the students or siblings might vouch in as nominees. The loan for education can be taken for both full-time courses as well as part-time courses.
Some banks also offer educational loans to vocational courses. There is an interest rate added upon the loan, and the student must repay it. But the period of repaying an educational loan begins only after the completion of the academic course.
The educational loan has the unique feature of the moratorium. According to this, the borrower can decide to not pay any amount back to the institution up to 12 months of the course completion. This is an added advantage as students have sufficient time to get a job after education to pay off their loans.
2) Vehicle loan:
This is a kind of loan provided for the purchase of vehicles for a person. The vehicle can either be a new vehicle or even second-hand. Based on one’s preference and priority, the decision is made. Vehicle loans can be used for both two-wheelers as well as four-wheelers.
Although vehicle loan is highly flexible, it too holds on to certain restrictions.
One such restriction is that the borrower’s financial status plays a vital role in issuing a vehicle loan. Credit scores with debt to income ratio, loan tenor are taken into consideration. PM Svanidhi can be availed in Zip loan.
3) Personal loan:
Personal loan is also highly popular for their availability of instant liquidity. Yet, the principal drawback is that a person is under the category of an unsecured loan. This makes it have a higher interest rate in contrast to other secured loans. Ziploan offers affordable MSME loans.
Some of the purposes to avail a personal loan are as follows:
- Manage expenses
- Pay for vacations
- Home renovation finance
- Fund child’s education
- Consolidate all your debts
Apart from the loans mentioned above, there are also other types of loans like Flexi loans, short-term business loans, standup loans, MSME loans, and shares, among many others.
Based on one’s need and capacity, you can take a loan. For more details, contact Ziploan at 011-4310-9577 or mail at customer.care@ziploan.com.
Frequently Asked Questions
Following are the types of loans available in India:
1) Personal Loans
2) Credit Card Loans
3) Home Loans
4) Car Loans
5) Two-Wheeler Loans
6) Small Business Loans
7) Payday Loans
Here are the best five government loan schemes in India:
1- MSME Loan in 59 Minutes
2- Pradhan Mantri MUDRA Yojana (PMMY)
3- Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE)
4- National Small Industries Corporation (NSIC)
5- Credit Linked Capital Subsidy Scheme (CLCSS)
A government-backed loan is a loan subsidized by the government, also known as a Federal Direct Loan, which protects lenders against defaults on payments, thus making it a lot easier for lenders to offer potential borrowers lower interest rates.
A conventional loan is a mortgage loan that’s not backed by a government agency. Conforming conventional loans follow lending rules set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
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