From Dreams to Reality: Types Of Loans & Who Can Apply In 2023

Introduction : 

In This Article We Will Discuss About Loans , Its Types , Categories & Subcategories, And The Benefits From Various Types Of Loans &  Its Eligibility Criteria.  

In General , We Can Say loans are Nothing But Borrowing Process. When An Individual Or An Organization Borrows Some Amount Of Funds From Banks Or Any Financial Organization At A Certain Rate Of Interest For A Certain Period , Is Called As Loans. 

There Are Several Categories Of Loan Based Upon The Purpose Of The Borrower. Each Loans Has Some Specific Criteria & Benefits That We Will Discuss In This Article.  

Types Of Loans

Basically There Are 2 Main Categories Of Loan .

  1. Secured Loans
  2. Unsecured Loans

Secured Loans Are Those Loans That Require Borrowers To Pledge Their Assets Or Some Form Of Security In Order To Apply For The Loan. Secured Loans Don’t Require The Borrower To Furnish A Cibil Score . Gold Loans & Loan Against Properties Are The Best Examples Of Secured Loans. 

Unsecured Loans Are Those Loans That Don’t Require Borrowers To Pledge Their Assets Or Some Form Of Security In Order To Apply For The Loan.Unsecured Loans Require The Borrower To Present A Cibil Score Above A Standard Range i.e 650 Or Above. Education Loans & Agriculture Loans Are The Most Suitable Examples Of Unsecured Loans.

Let’s Discuss About The Subcategory Of Loans That Comes Under These Main Categories. 

Types Of Loans & Their Eligibility Criteria.png

Secured Loans :

Some Important Types Of Secured Loans Are Mentioned Below :

  • Home Loan
  • Gold Loan
  • Car Loan
  • Two-wheeler Loans
  • Loan Against Property
  • Loan Against PF/EPF
  • Loan Against Fixed Deposit
  • Others etc.

Unsecured Loans :

Some Important Types Of Unsecured Loans Are Mentioned Below :

  • Personal Loans
  • Cash Loan
  • Business Loans
  • Education Loans
  • Agricultural Loans
  • Credit Card Loan
  • Others etc.

Secured Loan Types :

Let’s Discuss Each Loans, Their Benefits & Eligibility Criterion

Home Loans 

If A Person Wants To Purchase A Home Or Construct A House Or Purchase A Plot Or Renovating A Home , Then Home Loans Can Be Applied From A Bank Or Any Financial Organization.

It Is A Secured Loan In Which Borrower Has To Pledge That Home Or Plot In Order To Avail Or Obtain The Loan.

Eligibility Criteria  & Other Factors :

  • Age: Usually Between 21 To 60 Years Old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: CIBIL Credit Score Should Be Standard.
  • Amount Of Funds : Home loans can range from several lakhs to crores, depending on the property’s cost and the borrower’s eligibility.
  • Interest Rates:Home loan interest rates are usually lower than personal loan rates and can range from around 7% to 12% per annum, depending on the lender and the loan type (fixed or floating).
  • Tenure : Home loan tenures can extend up to 30 years, allowing borrowers to repay the loan over a long period.

Gold Loans

In Gold Loans, The Borrower Has To Pledge Gold Ornaments Or Gold Coins In Exchange For Funds .

In Other Words We Can Say That It Is A Secured Loan Against Gold Ornaments Or Coins. Usually Gold Loans Interest Rates Are Lower Aa Compared To Other Loans. 

Eligibility Criteria  & Other Factors :

  • Age: Usually between 18 to 70 years old..
  • Employment: The gold being pledged should be owned by the borrower.
  • Income: The borrower should have a stable income to repay the loan. gold’s purity may be evaluated to determine the loan amount.
  • Credit Score: A Good Credit Score Is Necessary..
  • Amount Of Funds : Gold loan amounts are usually a percentage of the gold’s value being pledged, typically ranging from a few thousand rupees to several lakhs.
  • Interest Rates:  Gold loan interest rates are generally lower compared to personal loans and can range from around 7% to 24% per annum..
  • Tenure : Gold loan tenures are generally shorter, often ranging from a few months to a few years

Car Loans

When A Person Wants To Buy A Car , But Can’t Afford The Price , He Can Borrow That Amount Of Funds To Purchase A Car. A Car Loan Is A Secured Loan In Which That Car Works As A Collateral Against The Loan.

Eligibility Criteria  & Other Factors :

  • Age: Usually Between 21 To 60 Years Old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A good credit score alwaya improves your chances of approval.
  • Amount Of Funds : Car loans can range from a few lakhs to around 100% of the car’s ex-showroom price, depending on the lender’s policies and the borrower’s eligibility.
  • Interest Rates: Car loan interest rates typically range from around 8% to 12% per annum, depending on the lender and the borrower’s creditworthiness.
  • Tenure : Car loan tenures usually range from 1 to 7 years.

Two Wheeler Loans

We Know , It Is Almost Every Middle Class People’s Dream To Have A Bike Or Scooty Of Their Own. But It Becomes Impossible For Them To Purchase A Two Wheeler , But By Pledging That Two Wheeler As Collateral,  Borrowers Can Avail Two Wheeler Loans Or Bike Loans.

Eligibility Criteria  & Other Factors :

  • Age: Usually between 18 to 65 years old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A Standard Credit Score Is Mostly Preferred..
  • Amount Of Funds : A Few Thousand Rupees To Several Lakhs, Depending On The Lender And The Borrower’s Eligibility.
  • Interest Rates:  Loan Interest Rates Can Vary From Around 10% To 30% Per Annum, Depending On The Lender And The Borrower’s Creditworthiness.
  • Tenure : Personal Loans Usually Have Tenures Ranging From 1 To 5 Years.

Loan Against Property

A Loan Against Property or LAP Is A  Type Of Secured Loan In Which  Borrowers Property Is Being Pledged As Collateral. A Borrower Can Utilize The Fund As He Wants , Because It Doesn’t Have Any End-use Restrictions. 

Eligibility Criteria  & Other Factors :

  • Age: Generally between 21 to 70 years old.
  • Employment: The borrower should have a stable income to repay the loan
  • Income: The property to be mortgaged should be owned by the borrower.
  • Credit Score: A Good Credit Score is mustPreferred..
  • Amount Of Funds : The loan amount for LAP is usually a percentage of the property’s value being mortgaged, often ranging from lakhs to crores..
  • Interest Rates:  LAP interest rates typically range from around 8% to 15% per annum.
  • Tenure : LAP tenures can extend up to 15 years or more.

Loan Against PF/EPF

If A Borrower Has A Provident Fund Or Pf Account, It Is Possible To Get A Loan Against PF. Such Loans Have No Additional Interest Rates. However, Pf Withdrawal Is Only Allowed For Specific  Predefined Emergencies Like Medical Emergency, Home Purchase, Wedding, Unemployment, Etc.. 

Eligibility Criteria  & Other Factors :

  • Age: Usually Between 21 To 60 Years Old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A Good Credit Score is Preferred..
  • Amount Of Funds : A Few Thousand Rupees To Several Lakhs, Depending On The Lender And The Borrower’s Eligibility.
  • Interest Rates:  Loan Interest Rates Can Vary From Around 10% To 30% Per Annum, Depending On The Lender And The Borrower’s Creditworthiness.
  • Tenure : Personal Loans Usually Have Tenures Ranging From 1 To 5 Years.

Loan Against Fixed Deposit

 A Borrower Has A Fixed Deposit Or FD Account, It Is Possible To Get A Loan Against PF. A Certain Percentage Of Total Deposit Amount Can Be Borrowed At An Interest Rate Of 2% Higher Than The Applicable FD Rate.

Eligibility Criteria  & Other Factors :

  • Age: Usually between 18 to 60/65 years old.
  • Employment: The borrower should have a fixed deposit with the bank.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A Good Credit Score is alwaysPreferred..
  • Amount Of Funds : A Few Thousand Rupees To Several Lakhs, Depending On The Lender And The Borrower’s Eligibility.
  • Interest Rates:  Loan Interest Rates Can Vary From Around 10% To 30% Per Annum, Depending On The Lender And The Borrower’s Creditworthiness.
  • Tenure : Personal Loans Usually Have Tenures Ranging From 1 To 5 Years.

Others 

There Are Also Many More Secured Loans That Hasn’t Been Discussed In This Article, But The Discussed Points Are The Most Important Ones.

Unsecured Loan Types :

Let’s Discuss Each Loans, Their Benefits & Eligibility Criterion .

Personal Loans: 

Personal Loans Are Unsecured Loans That Can Be Used To Meet Any Type Of Financial Requirement Like Marriage , Travelling , Home Renovation Etc . A Borrowers Must Have A High Credit Score , Stable Income To Avail This Loan At Low Rates.

Eligibility Criteria & Other Factors :

  • Age: Usually Between 21 To 60 Years Old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A Good Credit Score is mostly Preferred..
  • Amount Of Funds : A Few Thousand Rupees To Several Lakhs, Depending On The Lender And The Borrower’s Eligibility.
  • Interest Rates:  Loan Interest Rates Can Vary From Around 10% To 30% Per Annum, Depending On The Lender And The Borrower’s Creditworthiness.
  • Tenure : Personal Loans Usually Have Tenures Ranging From 1 To 5 Years.

Cash Loans :

Cash Loans Is Almost Same As Personal Loan , But Here The Borrower Can Avail The Loan Easily By Mobile Apps.

Eligibility Criteria  & Other Factors :

  • Age: Usually Between 21 To 60 Years Old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A Good Credit Score is mostly Preferred..
  • Amount Of Funds : A Few Thousand Rupees To Several Lakhs, Depending On The Lender And The Borrower’s Eligibility.
  • Interest Rates:  Loan Interest Rates Can Vary From Around 10% To 30% Per Annum, Depending On The Lender And The Borrower’s Creditworthiness.
  • Tenure : Personal Loans Usually Have Tenures Ranging From 1 To 5 Years.

Education Loans 

Education Loans Are Used To Fund For Higher Education Likes Tuition Fees, Accommodation, Living Expenses Borne By The Students During The Course Of Study.

Eligibility Criteria  & Other Factors  :

  • Age: Usually Between 21 To 60 Years Old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A Co-borrower or Guarantor: A parent or guardian may be required as a co-borrower or guarantor.
  • Amount Of Funds : Education loans can cover the entire course fees or a specific amount based on the lender’s policies and the borrower’s eligibility..
  • Interest Rates:  Education loan interest rates can range from around 8% to 15% per annum, depending on the lender and the loan amount.
  • Tenure : Education loan tenures can range from a few years to the repayment period after course completion.

Agricultural Loans

Agricultural Loans Are Available For Different Kinds Of Farming Related Activities.

Eligibility Criteria  & Other Factors :

  • Age:Depends on the lender, usually between 18 to 70 years old.
  • Employment: Some lenders may require a minimum farming experience.
  • Income: The land being used for agriculture should be owned by the borrower.
  • Credit Score: A Good Credit Score is basically Preferred..
  • Amount Of Funds : A Few Thousand Rupees To Several Lakhs, Depending On The Lender And The Borrower’s Eligibility.
  • Interest Rates:  Loan Interest Rates Can Vary From Around 10% To 30% Per Annum, Depending On The Lender And The Borrower’s Creditworthiness.
  • Tenure : Personal Loans Usually Have Tenures Ranging From 1 To 5 Years.

Credit Card Loans 

If The Borrower Has A Credit Card , Then Credit Card Loans Can Be Applied. It May Or Maynot Depend On Credit Card Limit. 

Eligibility Criteria & Other Factors: 

  • Age: Usually Between 21 To 60 Years Old.
  • Employment: Salaried Or Self-employed Individuals With A Regular Source Of Income.
  • Income: Minimum Income Requirements Varies With Banks.Income Stability And Work Experience May Also Be Considered
  • Credit Score: A Good Credit Score is strongly Preferred..
  • Amount Of Funds : A Few Thousand Rupees To Several Lakhs, Depending On The Lender And The Borrower’s Eligibility.
  • Interest Rates:  Loan Interest Rates Can Vary From Around 10% To 30% Per Annum, Depending On The Lender And The Borrower’s Creditworthiness.
  • Tenure : Personal Loans Usually Have Tenures Ranging From 1 To 5 Years.

Business Loans 

Business Loans Are Meant For Funding Various Business-related Requirements, Such As Expansion, Working Capital, Buying Equipment, Or Starting A New Venture.

Eligibility Criteria & Other Factors:

  • Age: Usually between 18 to 70 years old.
  • Employment: The business should have a steady source of income.
  • Income: The business should be operational for a certain period (varies by lender).
  • Credit Score: Both the individual and business credit scores may be considered.
  • Amount Of Funds : Business loans can vary widely depending on the lender and the borrower’s financial needs and repayment capacity.
  • Interest Rates:  Business loan interest rates can vary significantly and typically range from around 9% to 24% per annum.
  • Tenure : Business loan tenures can range from 1 to 5 years, depending on the loan type and purpose.

Others

There Are Many More Types Of  Unsecured Loans .

Documents Required For Some Important Loan :

Personal loans:

  • Proof of Identity: Passport, Voter ID , Aadhaar Card, any other government issued photo ID.
  • Address Proof: Aadhaar Card, Passport, Utility Bills or Rent Agreement.
  • Proof of income: Pay slips, bank statements or income tax return (ITR) for the self-employed.
  • Passport size photos.
  • Employment certificate: offer letter, employment letter or employment certificate.

Mortgage:

  • Proof of identity.
  • Proof of address.
  • Proof of income: Salary slips, form 16, bank statement or ITR for self-employed.
  • Property documents: Sale agreement, title deeds and property tax receipts.

Car loan:

  • Proof of identity.
  • Proof of address.
  • Proof of income: Salary slips, form 16, bank statement or ITR for self-employed.
  • Vehicle details: Proforma invoice or quotation from car dealer.

Education loan:

  • Proof of identity.
  • Proof of address.
  • Education documents: Letter of admission, marks and certificates from the educational institution.
  • Course costs: Fee structure from the educational institution.
  • Proof of income for co-borrower or guarantor (if applicable).

Business loans:

  • Proof of identity.
  • Proof of address.
  • Evidence of business history: Business registration documents, trading license, etc.
  • Proof of income: bank statement, ITR, audited annual accounts..
  • Business plan: A detailed business plan with a loan objective..

Final Words

The Informations On This Article Purely Based On Indepth Market Research , However Realtime Data May Varies Bye Various Banks Or Financial Organization. 

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LOANS FAQs

How Many Types Of Loans Are There ?

Answer – Basically There Are 2 Main Categories Of Loan :- Secured Loans & Unsecured Loans

What Are The Documents Required To Apply For Home Loan ?

Answer –

Proof of Identity: Passport, Voter ID , Aadhaar Card, any other government issued photo ID.
Address Proof: Aadhaar Card, Passport, Utility Bills or Rent Agreement.
Proof of income: Pay slips, bank statements or income tax return (ITR) for the self-employed.
Passport size photos.
Employment certificate: offer letter, employment letter or employment certificate.

What Are The Documents Required To Apply For Vehicle Loan ?

Answer –
Proof of identity.
Proof of address.
Proof of income: Salary slips, form 16, bank statement or ITR for self-employed.
Vehicle details: Proforma invoice or quotation from car dealer.

What Are The Documents Required To Apply For Education Loan ?

Answer –
Proof of identity.
Proof of address.
Education documents: Letter of admission, marks and certificates from the educational institution.
Course costs: Fee structure from the educational institution.
Proof of income for co-borrower or guarantor (if applicable).

What Are The Documents Required To Apply For Business Loan ?

Answer –
Proof of identity.
Proof of address.
Evidence of business history: Business registration documents, trading license, etc.
Proof of income: bank statement, ITR, audited annual accounts..
Business plan: A detailed business plan with a loan objective

Loan Kitne Prakar Ke Hote Hain ?

Answer – Mool Roop Se, Loan Ke Do Pramukh Prakar Hote Hain: Surakshit Loan Aur Asurakshit Loan.
Answer – Basically There Are 2 Main Categories Of Loan :- Secured Loans & Unsecured Loans.

Vehicle Loan Lene Ke Liye Kya Kya Documents Chahiye ?

Vehicle Loan Lene Ke Liye Aavedan Karne Ke Liye Aapko Niche Diye Gaye Dastavez Chahiye Honge:
Pehchaan ka saboot: Isme aap apna Aadhar card, passport, ya driver’s license ka istemal kar sakte hain.
Pata ka saboot: Utility bills ya kisi bhi dastavej jo aapke current address ko darust darust kar sake.
Aay ka saboot: Agar aap ek naukri par hain, toh apne vetan patro ya Form 16 provide karen. Agar aap svayam vyavsayi hain, toh apne bank ke vittiya vistaar ya income tax returns (ITR) submit karen.
Gadi ke vivaran: Car dealer se proforma invoice ya quotation prapt karen, jisme aapko khareedne wali gadi ke vivaran milenge.

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