Loans are substantially capital borrowed from any bank or any trustable financial institution. The respective institutions tend to charge interest against the lending capital for a certain definite period. For a lot of banks loans are a specialized way to meet emergencies while for others, loans tend to act as a potential catalyst for growth. It usually depends upon the multipurpose and the kinds of loans that the borrowers have ensured to avail. Personal loans in Noida given by various banks are available that a borrower can access. Here are some of the different kinds of loans that borrowers can usually avail of from numerous lending institutions.
Different Kinds of Loans in India
Following are the various kinds of bank loans in India that are offered by the banks as well as the financial institutions:
Secured Loans
Secured loans are provided against security. The borrowers tend to furnish security for availing of secured loans. In such a case of secured loans, lenders lowers the risk of default by the borrower. For these, the borrower is unable to repay the loan, then the lender can usually sell the asset to recover any dues. This is also the main reason why secured loans carry a reduced interest rate than unsecured loans.
Unsecured Loans
These are the exact opposite of secured loans. Unsecured loans are provided against the income or the prospective income-earning capacity of the borrower. As related to unsecured loans, the borrowers are usually not required to furnish any kind of security. The lenders also ensure to extend unsecured loans specially based on the documents provided by the borrower, their income potential, along with their CIBIL history.
Types of Secured Loans
Following are the various types of secured loans that borrowers can usually avail of from the lending institutions:
Home Loans
These are the most general kinds of secured loans availed of by borrowers. As the name usually suggests, home loans are particularly taken for the purchase or construction of a home by any borrower. Also, the home itself usually acts as a security for these lenders. Nevertheless, while the home is the primary security, the lender may often need the borrower to furnish collateral security as well depending upon the borrower’s profile along with the valuation of the home. This can either be a fixed deposit or any other asset. Home loans are long-term loans and the loan tenure can range from 10 years to as long as 25 years.
Loan Against Property
This is a kind of mortgage loan whereby the borrowers can avail of funds by mortgaging their property with the lender. Loan against property can be availed of against both residential as well as the commercial property. The administration usually charges for loans against property are considerably more than for home loans. The funds can be utilized by various lenders for either business or any other personal purposes.
Loan Against Securities
Investors often invest in shares and securities. This can also include the following for instance shares, mutual funds, bonds and the debentures. The investors are greatly eligible to borrow capital from banks along with financial institutions against these securities. Nevertheless, as the securities are substantially volatile in nature, LTV for loans against securities is about 50% of the security value. This is to also ensure to protect the lender against any possible downside risk due to a fall in the security value. In addition, the rate of interest in the case of loans against securities also differs depending upon the kind of security. It can begin anywhere varying between 7.50% per annum.
Kinds of Unsecured Loans
Following are the different kinds of unsecured loans that borrowers can gradually avail of from the lending institutions:
Personal Loans
This is one of the most sought-after bank loans in India. Personal loans in Noida are loans extended by banks or financial institutions without any collateral security. It is also vital for a loan against the income of the borrower. The predominant features of personal loans are that it usually does not require any collateral security, and there is no restriction as to the end usage of the borrowed funds. The borrower can essentially use the amount borrowed for any kind of purpose, either be it medical emergencies, marriage, education of the children, purchasing any possible asset or any traveling.
Short-term Business Loans
Unforeseen circumstances can strike the business at any moment. In this case a business is usually facing a financial crunch, however it then goes for short-term business loans. Such bank loans are critically structured to help businesses meet short-term uncertainties and financial crises. The eligibility criteria are considerably simplified, along with the amount of loan that can be disbursed depending upon the profitability of such business as well as the profile of the borrower.
Education Loans
The true cost of education is rising at a rapid pace. If a person wants to pursue quality education, then he/she requires to shell out lakhs of rupees. For such cases, an education loan offers typical monetary assistance. The rate of interest on education loans can begin from 8.85% per annum, as well as the amount of the loan tend to depend upon the education cost. The repayment for education loans often begins for a period of 12 months post completion of the education.