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The different types of loans that are available in India

A loan is an amount of money borrowed from a financial institution with a promise to repay the principal along with its interest. The interest rate on the loan is usually based on the type of loan and the term of the loan. Ziploan offers affordable Stand Up Loans For India.

Loans can be taken out for a variety of reasons, ranging from personal needs to professional needs. Indians often take out loans. In order to meet this need for financial assistance, the institutes have therefore taken out different loans. Some of them are as follows:

On the general classification, the different types of loans in India are divided into two categories.

Secured Loan: A secured loan requires the borrower to pledge an asset equal to its monetary value. Only then is the loan granted.

If a situation arises where you cannot repay the loan, the lender has full authority to stop and own the pledged wealth.

Some of the most common types of secured loans are as follows:

1) Home Loans:

It is one of the most widely procured loans in India. This loan will help citizens find a home. Some of the most common purposes of a home loan are as follows:

  • Buying Land: In this case, the home loan is used to purchase plans to build the house.
  • House construction: In this case, the property already exists. But for the need to build a house, the loan was taken out.
  • Balance Transfer: In this state, a home loan already exists, but the amount is transferred to another loan with minimal interest.

2) Loans for insurance policies:

People who have taken out insurance can also apply for a loan based on the insurance they have taken out. But there are certain restrictions on these loans.

Only loans with a money back guarantee and capitalization qualify for sanctioning on this loan. The other important element to focus on is that the loan for the insurance policy must also have a term.

This limitation prevents many people from availing this loan because they cannot take out the loan with term life insurance. Term life insurance is one of the most widely taken out insurances in the country. Term life insurance has no benefits when due.

No insurance policy is taken out with term life insurance. The other common insurance policy that is neglected with this type of loan is unit-linked insurance.

With this type of insurance, the money-back guarantee is based solely on market conditions. It will be highly unpredictable to make a loan on such a fragile basis. This means that unit-linked insurance is also not eligible for the loan.

3) Gold Credit:

The gold loan is another common form of loan that is visible in every Indian household. This loan is taken on the gold value. The main reason for this is that the gold loan in India has a very flexible interest rate. This makes it easy to borrow and lend money by looking at insurance rates.

With a gold loan, there is a need to pledge gold jewelry as collateral. Based on the valuation of gold, the loan amount is generally a question. Compared to other types of credit, a gold loan usually has a very short repayment period.

It is based solely on the short term needs of the borrower and also has flexible interest rates. After the loan amount and its interest have been repaid in full, the pledged gold will be returned as security.

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Unsecured loan:

1) Education loan:

The most common loan taken out by younger society is an education loan. It is with this loan that most of the people pursue their studies. An education loan often covers the cost of education fees such as tuition and other such as housing, transportation, and similar other costs.

As a rule, it is the students themselves who train education loans for their personal needs. But parents of the students or siblings are often nominated. The education loan can be used for both full-time and part-time courses.

Some banks also offer education loans for vocational training. An interest rate is charged on the loan which the student must repay. However, the period of repayment of an education loan begins only after graduation.

The educational loan has the peculiarity of the moratorium. Thereafter, the borrower can decide not to repay any amount to the institution for up to 12 months after completing the course. This is an added benefit as it gives students ample time to find a job after graduation to pay off their loans.

2) Vehicle credit:

This is a type of loan for buying vehicles for one person. The vehicle can either be new or even used. The decision is made based on one’s own preference and priority. Car loans can be used for both two-wheelers and four-wheelers.

Although the car loan is very flexible, it also adheres to certain restrictions.

One such limitation is that the borrower’s financial situation plays a crucial role in the process of obtaining a car loan. Credit scores with debt-to-income ratio, repayment term are taken into account. PM Svanidhi can be availed in the Zip Loan.

3) Personal Loans:

Personal loans are also very popular because of their instant liquidity. However, the main disadvantage is that a person falls under the unsecured loan category. This makes the interest rate higher than other secured loans. Ziploan offers affordable MSME loans.

Some of the purposes of obtaining a personal loan are as follows:

  • Manage expenses
  • Pay vacation
  • Financing the apartment renovation
  • Fund the child’s education
  • Consolidate all of your debts

In addition to the loans mentioned above, there are also other types of loans such as flexi loans, short-term Business credit, Stand Loans, MSME loans, and stocks, among many others.

Depending on your needs and capacity, you can take out a loan. For more information, contact Ziploan at 011-4310-9577 or send an email to [email protected]

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frequently asked Questions

What types of credit are there?

Below are the types of loans available in India:
1) Personal Loans
2) Credit Card Loans
3) Home Loans
4) car loans
5) two-wheeler loan
6) Small Business credit
7) Payday Loans

What are the top five government loan programs in India?

Here are the five best government loan programs in India:

1- MSME credit in 59 minutes
2- Pradhan Mantri MUDRA Yojana (PMMY)
3- Micro and Small Business Loan Guarantee Fund System (CGFMSE)
4- National Small Industries Corporation (NSIC)
5- Loan Linked Capital Subsidy Program (CLCSS)

What are the government bonds called?

A government-secured loan is a government-subsidized loan, also known as a federal direct loan, that protects lenders against payment defaults and thus makes it much easier for lenders to offer potential borrowers lower interest rates.

Is a conventional loan a government loan?

A conventional loan is a mortgage loan that is not covered by any government agency. Compliant conventional loans follow the lending rules of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).

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Richard Dement

The author Richard Dement