Loan is one of the widely used source of finance across the industries. Know more about the different types of banks loans available in India.

1. Types Of
Bank Loans in
India

2. What is Loan ?
▰ A loan can be money, property or material goods
received from bank, friends, or any other financial
institution.
▰ This amount is repaid along with interest in specific
time period.
▰ It can be specific one-time amount or open-ended line
of credit with certain limit.
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3. Categories of Loans
3
Categories of
loans
Unsecured
Personal
Loans/Purpos
e loans
Credit card
Secured
Car loanHome loan
Loan
Against
Property
Education
Peer-to-Peer
…….

4. Secured v/s Unsecured
Secured loans
▰ Secured loans are the
ones which is backed by
a collateral. This
collateral can be kept by
lender in case one is not
able to repay the loan in
pre-determined time.
▰ It tends to have lower
interest rates.
Unsecured Loans
▰ Unsecured loans are not
protected by any
collateral. In case of
default, lender won’t be
able to seize any asset of
borrower.
▰ It tends to have higher
interest rates because of
higher risk4

5. Different types of loans
▰ Personal Loans
▰ Business loans
▰ Car loan
▰ Home Loan
▰ Marriage Loan
▰ Education loan
▰ Payday loans
▰ Two wheeler loan
▰ Travel loan
▰ Consumer durable loan
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▰ Cash loan
▰ Medical loan
▰ Loan against Property

6. * It’s a loan that allows potential buyer to pay off the
vehicle through EMIs where as bank pays full which
is repaid by borrower along with interest.
# Types of car loans
- For a new car
- For a used car
- Against an existing car
* Loan amount can be 2.5-3 times annual salary for
salaried person and 6 times annual income for self
employed
* Documents required: Identity proof, resident proof
& income proof
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Car Loans

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* Lender gives home loan against a property and in case
of default, the bank or lending company has legal rights
to sale the property and recover the outstanding loan
amount.
# Types of home loans
- Home purchase
- Home renovation
- Land Purchase
- Home construction & few more
* It falls under category of secured loans and tenure is
fixed ranging from 5-30 years.
Home loan

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* It is unsecured loan used for many purposes
like wedding, business, home renovation,
medical emergency, debt consolidation, etc.
* Its benefits include: flexibility of use, easy
availability, no collaterals, & minimum
documentation.
* Age, number of years in current job and in
current residence, income, etc. are some of
the factors that are considered before giving
loan.
Personal Loans

9. * It can be availed for fulfilling the urgent needs of
growing business.
It can be used for extending the business, improving
production, buying new machinery, etc.
# Types of business loans
- Working capital loan
- Business loans for women
- SME & MSME loans
* It requires information about financial statements,
accounts receivable, accounts payable, insurance
details, etc.
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Business loans

10. * It is kind of a purpose loan which falls under
unsecured loan category.
* Weddings in India is a great affair as it comes
with lot of planning and expenses. Marriage loan
helps you organize a wedding smoothly.
* It has higher rates starting from 11% to 24-25%. It
depends on creditworthiness, repayment history,
sources of earning, credit score, etc.
* In addition to this, processing fee of 1-3 % is
levied on marriage loans.
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Marriage loans

11. * Education loan is very important aid for those
who wants to study further but do not have
enough funds.
* Some of the benefits of education loans are tax
benefits, deferred repayment, lower interest rates,
builds good credit history, etc.
* Factors considered for giving this loan is
university where education is sought, eligibility
of co-borrower, evaluation of collateral, etc.
* It can be availed for higher education in India,
loan for study in abroad, executive MBA, etc.
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Education loan

12. * Loan against property is nothing but a loan which you
avail by keeping your commercial/residential property
as a collateral. Another name for Loan against property
is a secured loan.
* The security in this kind of loan is the property owned
by the person applying for the loan.
* Some of the advantages includes lower interest rates,
higher value loans and unlocks the true potential of
asset.
* Things checked before giving this loan are property
value and type, income, creditworthiness,
etc.
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Loan against property

13. * A payday loan is a type of short-term borrowing
where a lender will extend high interest credit
based on a borrower’s income and credit profile.
* A payday loan’s principal is typically a portion of
a borrower’s next paycheck.
* Payday loans charge borrowers high levels of
interest.
* These loans may be considered predatory loans
as they have a reputation for extremely high
interest and hidden provisions that charge
borrowers added fees.
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Payday loans

14. * A consumer durable loan is a credit/finance option for
the purchase of household appliances, electronic goods
etc.
* The loan covers a whole range of products ranging
from household necessities like a washing machine to
luxury gadgets like a high-end smartphone.
* The amount and tenure differs according to each
lender and the product that you wish to purchase.
* The durable loan amount could range from a few
thousands to a few lakhs, while the tenure could
range from 8 months to 3 years.
14 Consumer Durable Loan

15. * Everyone has dream holiday destination and travel
loan help you turn those dreams into reality by funding
them.
* Eligibility criteria :
- Minimum 21 years of age
- 6 months in current job
- Good credit score (at least 600-700)
- Income of at least 20,000/month
* These are indicative criteria which can change from
lender to lender.
* Pre-approved loans can be availed if one is already a
customer of concerned bank..
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Travel loan

16. * This loan amount is received by borrower in cash. It
can be given to private individual as personal loan or to
business as a business loan.
* This is also a unsecured loan but lender do make sure
that it is repaid in any circumstances.
* These loans are of small amounts whose tenure is not
more than a year
* It can be availed by those individuals who do not have
cash in hand but are capable of repaying it in near
future.
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Cash loan

17. * Medical loan can come handy when there is
medical emergency and insurance cannot cover the
expenses.
* Healthcare is becoming very expensive nowadays
so medical loans are savior in bad times.
It can be used to pay medical prescription bills,
surgeries, hospital bills, other treatments, etc.
* Benefits of Medical Loan:
- Minimum documents required
- Instant verification.
- Fast approval and disbursal in 24 hours
- Repayment terms as per borrower.
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Medical loan

18. * In todays fast moving world, two-wheelers are
common man’s rescue shield because buying a car is
not affordable by everyone.
* Two wheeler loan offers greater leverage for those
with lower annual income. Someone with 50,000
annual income can also avail this loan.
* It also has flexible tenure of up to 4 years. This
reduces the EMI amount and thus is doesn’t affect
borrowers monthly budget.
* Some lenders don’t take any extra charges thus
helping buyer to clear off their debts faster.
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