The very word loan invites unwelcome thoughts about cash flow crunch, undesirable thoughts about repayment, recovery officers pounding at your door and numerous other depressing thoughts. True that, a person takes a loan when in need of money. But the very idea of taking a loan need not be stressful and uncalled for. It is a fairly simple way of borrowing money from a bank or organizing in order to meet the current demand.
The basic essential for taking a loan is a bare minimal requirement of KYC documentation and keeping a security as a collateral. Rate of interest is determined by the type of loan you are availing; the amount of loan you have taken and the tentative time required for repayment. There are other factors too that determine what the interest rate should be. For different jurisdictions, the rates are different.
Let us take a look at the type of loans in India –
Personal Loan – It is private loan which you may avail for any purpose you want. The best part of taking a personal loan is that there is no demand for a security as a collateral. You could take this loan to cover wedding expenses, or buy a vehicle and so on.
Loan Against Property India – This loan can be taken when you keep a property as collateral. On the basis of the property collateral, you can avail any loan you want. The advantage of keeping a property as security against the loan in that the rate of interest goes down substantially and you can repay the loan in easy monthly instalments (EMI).
Home Loan – this loan is essentially meant for those who want to purchase a house. There are various kinds of home loans that can be availed, however, not each could be suitable to your purpose. By taking the wrong kind of loan, you could end up repaying much more than you bargained for. Home loans can also be transferred from one bank to the other.
Loan for Business – To start any business, one needs capital. You can get this capital by applying for a business loan. If you have a concrete plan and strategy about development of the business, the process of availing this loan and the method of repayment becomes much easier to handle. Generally, there are two kinds of Business loans that can be availed – Professional loan and trade loan. Both of these have different requirements and rate of interest.
Apart from the ones mentioned above, there are other loans that can be availed – credit loan, car loan, study loan, etc. The process of taking a loan can be a tricky one if you are not aware of what kind of loan to take and which institution to pick. Hence, if in doubt, always approach a loan advisor. As they are experts in the field of consulting about loans, they will be able to guide you the best way forward, taking account of your requirement. Talk to them about option of repayment and easy lending, etc. Not all loans require a heavy security deposit. An expert loan advisor will be able to explain to you and advise on the best deals and rate of interest being offered by different banks.