Types Of Loans | Best Method To Apply For Loan

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A loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. In today’s world, a loan can be taken out for several reasons, from funding your business to education to buying new devices or appliances for your home.
In today’s article, we will talk about the different types of loans available in the market, how one can take them out, and in which scenarios, what kind of loan is the best for you.


TYPES OF LOANS

PERSONAL LOANS


These kinds of loans can be taken for any reason, from paying an overdue bill to purchasing an item and most banks offer such loans.
To apply for a personal loan, you need to provide certain documents like proof of assets, proof of income, etc. This is to ensure that the borrower her enough money to repay the loan.
The bank or lender will approve or deny this loan within a few days.
The rate of interest is high with these loans and the tenure is not that long. So, if you want to take a small loan and plan on repaying it ASAP, then you can take this loan.


Vehicle Loans:


This can be of two kinds, car loan or two-wheeler loan.
Having a vehicle can make your life better by helping you commute easily.
A car loan can help you own the car of dreams! To apply for a car loan, it is imperative to have a high credit score. Your loan will be easily approved if you and you will get a lower interest rate depending on your credit score.
The same applies to two-wheeler loans.
If you fail to pay your installments, the bank or lender can and will take back your vehicle to recover the outstanding debt.


Business loan:


A Business loan is a loan taken specifically to meet various business requirements, like funding the expansion of your business, purchasing long-term assets for the business, buying inventory, paying off business debts, meeting the working capital requirements, to even opening a new branch or franchise.
To be eligible for business loans, the criteria include the age of the business owner, no. of operational business years, income tax returns, and the previous year’s turnover audited by a CA.


Home Loans:


Do you want to get the home of your dreams but need some financial support to do so? You should apply for a home loan to not just buy a home but for home renovations, home extensions, etc.
These loans generally have a longer tenure to pay off the debt and the interest rate on the loan depends on your credit score.
The bank first checks the credit score of the borrower before approving the loan request.


Gold Loan:


You can take a gold loan for anything, expanding your business, education, emergency, medical reasons, etc.
In the case of a gold loan, gold is placed as security or collateral in place for the loan. The loan amount depends on the value of gold in the market on the day. This loan takes into account only the gold content.


Education Loan:


Education loan is taken to specifically finance for education, be it school or college. It covers the course fees, examination fees, accommodation fees, or charge for any equipment the borrower needs.
The borrower is the student who needs this loan and they can make any relative into a co-applicant.
They cover part-time or full-time vocational courses as well as undergraduate and postgraduate courses, in India or abroad.

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