Karz means debt, a word people wanted to avoid in earlier times. In the olden days, people used to consider borrowing against their pride. Those who used to work with loans, they also got less respect in the society.
But today completely 360 degree has changed. An old saying ‘drinking ghee with a loan’ rings true in this day and age. In the world of appearances, nowadays people are buying less things on the basis of need and more things for show off. Now his pocket will accept this or not.
This is the compulsion of the people or should we say that they caught the weakness of the bankers and gave loans to the customers in very easy and cheap installments. Now the trend of ‘No Cost EMI’ has increased rapidly in the country. The habit of people taking things on loan has become so dominant in the country that now banks have started giving you loan for everything. Amidst so many loans, you will also get confused that how many types of loans are there in the country. Today we are going to answer this question.
home loan
Every person dreams of his own house. Some people complete it on their own while some people complete it by taking loans from banks. It means its name itself. Home loan is taken by the borrower to buy or construct a house.
Home loan interest rates start between 7 per cent per annum to 7.5 per cent per annum. You can repay the loan in Equated Monthly Installments (EMI). The loan-to-value (LTV) ratio is typically 80 percent. This means, the borrower can avail a loan of up to 80 per cent of the value of the property.
gold loan
Gold loan is taken against the gold owned by the borrowers. Here, the gold acts as a security for the lender so that the borrower can pledge the gold with the lender and receive money from them. Gold loan interest rates start from 7.50 per cent per annum. LTV on Gold Loan can go up to 90%.
vehicle loan
These are loans taken to buy a vehicle. Vehicles can include both passenger and commercial vehicles as well as two wheelers, four wheelers and heavy vehicles.
Interest rates on vehicle loans can start anywhere between 7 per cent per annum to 7.5 per cent per annum. LTV depends on the type of vehicle. For some vehicle loans, the bank may also lend up to 100 per cent of the value of the vehicle.
property loan
It is a type of mortgage loan, through which the borrower can get money by pledging his property with the lender. Loan against property can be availed against both residential and commercial properties.
The LTV for this loan can be anywhere between 65 percent to 70 percent. Here the interest rate starts from 8% per annum.
loan against securities
Investors often invest in shares and securities. This may include shares, mutual funds, bonds and debentures. Investors are eligible to borrow money from banks and financial institutions against these securities.
The LTV for loan against securities is 50 per cent of the security value. It can start anywhere between 7.50 per cent per annum.
loan against fd
Banks and financial institutions provide loans against FDs to the borrowers. Borrowers can avail loan against FD for an amount ranging from 60 per cent to 75 per cent of the FD value. FD rates range between 5 per cent to 7.5 per cent per annum depending on the amount and tenure.
loan against insurance
Loan against insurance is also one of the popular secured loans in India. Many people have life insurance policies, but hardly do they realize that the policy can act as a security against which money can be borrowed.
In case of insurance loans, the LTV can be anywhere between 85 per cent to 90 per cent per annum. The interest rate in this case can start anywhere between 10 per cent per annum to 12 per cent per annum.
working capital loan
Working capital loans are given by banks and financial institutions to help businesses meet their working capital needs.
Loan is also known as cash loan, here the loan amount can be availed on the basis of creditors, debtors and stock which constitutes the working capital for the business. The interest rate on working capital loan can start from 12% per annum.
personal loan
These are one of the most sought after bank loans in India. Personal loans are loans given by banks or financial institutions without any security.
The borrower can use the borrowed amount for any purpose, be it medical emergency, marriage, children’s education, buying a property or traveling.
The amount of personal loan a borrower can avail depends on the borrower’s income and his/her CIBIL score. Also, the interest rates on personal loans can range from 8% per annum to 10% per annum.
short term business loans
Uncertainty in business can come anytime. If a business is facing financial crisis, it can take a short term business loan. Interest rates for short-term business loans can range anywhere between 1 percent and 1.5 percent per month.
education loan
If you want to get quality education, you will have to spend lakhs of rupees. Education loan provides monetary assistance in such cases. The interest rate on education loan can start from 8.85 per cent per annum, the repayment of education loan usually starts 12 months after the completion of education.