A loan can be used for various purposes such as for starting of a new business, purchase of a home, buying appliances etc. Different loan types have a different use. Some of the loans are Personal loan, Home loan, Loan against property, Business loan, Car loan etc. Let’s discuss the different types of loan available in the market and their characteristics.

Personal Loan

Personal loan is an unsecured loan which is provided without any collateral or guarantee. It is very easily available if you are salaried and have a very good credit score. The lender of personal loan needs certain documents such as income proof, residential proof, bank statement etc. The borrower will get to know about proposal or denial within a couple of days. Banks and NBFCs both offer personal loans at very attractive rates and offers. You can apply for it online as well as by visiting the nearest branch.

Home Loan

Home loans are the loans which are availed to purchase a new home, renovation of existing property, construction etc. It is the largest selling banking product. It is also the biggest financial commitment that one can make in his life because tenure goes up to 30 years. The rate of a home is generally lower compared to the other unsecured loans. You will also eligible for the income tax exemptions which helps in saving the amount of income tax that an individual pays every year.

Car Loan

Buying a new car is a great sense of joy and happiness. It is an asset as well as the biggest investment. One cannot afford it to purchase in cash. Car loans help you to purchase a new car without any affords. Your loan application will be approved easily with the lower rate of interest associated with the loan.

Business Loan

A business loan is the best option to boost your investment and for the expansion of your business. It is usually availed for financing diverse business needs such as expansion, purchase of inventory etc. It is of two types secured and unsecured. The unsecured business loan does not require any collateral. On the other hand, a secured business loan required collateral. The business loan is considered the best monetary support in every business because you get the loan in bulk which you can invest in purchasing inventory, machinery etc and repay the loan in equally monthly EMIs.

Loan Against Property

The mortgage loan is generally availed for meeting personal and business needs. The rate of interest of mortgage loan is generally low because it is a secured loan. The tenure of mortgage loan goes up to 15 years. Both salaried and self-employed individuals can avail mortgage loan. Nowadays, many banks and NBFCs offers a mortgage loan. Different type of mortgage loan is available in the market, you can apply for the suitable type of mortgage loan which suits and fulfill your requirements. You can decide the tenure of the loan depending on your capability of repayment because long tenure leads to a higher rate of interest.

Above these are the different types of loan which one can avail in this financial year.

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