this ppt tells you about different types of loans

1. LOAN
And its related concepts​

2. A BRIEF HISTORY OF
TIME & LOAN
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• The concept of loan has never been foreign to India, it has existed for
thousands of years. Be it the time when Lord Kubera lent money to
Lord Venkateswara for his wedding or the time when Raja
Harishchandra used extreme means to pay his Dakshina to Sage
Vishwamitra.
• We can trace the evidences of loans from Arthshastra by Chanakya. Be
it the Vedic period when loan was given for agricultural purposes or the
Mauryan empire when we developed into more organized sectors for
granting loans, or the Gupta empire that witnessed the emergence of
moneylenders, India has a rich history in this sector.

3. Loans
3
Definition of loan can be described as a property, money, or other material goods that is given to another
party in exchange for future repayment of the loan value plus interest and other finance charges.
Features and Benefits of Loans
· The bank may apply several fees and charges to every loan.
· Many lenders provide instant loans that take a few minutes to few hours to get disbursed.
· The interest rate is determined by the lender based on the Reserve Bank of India’s guidance.
· The lender determines the requirement for security.
· A third-party guarantee can be used instead of security in some cases.

4. TYPES OF
LOANS
IN INDIA

5. Categories of Loans
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Unsecured
Personal
Loans
Credit card
Secured
Car loan
Home loan
Loan
Against
Property
Education
loan
…….

6. 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 risk
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7. Different types of loans
▰ Personal Loans
▰ Business loans
▰ Car loan
▰ Home Loan
▰ Agricultural Loans
▰ Education loans
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8. Personal Loans
It is unsecured loan used for many purposeslike
wedding,business,home renovation,medical emergency,debt
consolidation,etc.
Eligibility
● Nationality must be Indian.
● Minimum Age should be 21 years old.
● Employee with Private or Public company,
MNC.
● Good CIBIL score.
● Non-salaried individuals having regular
source of income
Documentation
● Proof of Identity:- Passport / Driving License /
Voters ID / PAN Card (any one)
● Proof of Residence:- Leave and License Agreement
/ Utility Bill (not more than 3 months old) / Passport
(any one).
● Latest 3 months Bank Statement
● 2 Passport Size photographs.

9. 9
Banks Interest Rates (p.a.)
Axis Bank 10.49% onwards
IndusInd Bank 10.49% onwards
IDFC First Bank 10.49% onwards
ICICI Bank 10.50% onwards
HDFC Bank 10.50% onwards
State Bank of India 10.55% – 14.55%
Punjab National Bank 10.40% – 16.95%
Union Bank of India 11.40% – 15.50%
Bank of India 10.25% – 14.75%
Central Bank of India 10.95% – 12.75%
IDBI Bank 11.00% – 15.50%
Yes Bank 10.99% onwards
UCO Bank 12.45% – 12.85%

10. Business Loans
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.
Documentation
1. Duly filled application form with Passport-sized
Photographs
2. KYC documents of applicants, partners, and co-applicants:
Passport, Aadhar card, Voter’s ID card, PAN card, Driving
license, Utility Bills (Recent Water or Electricity Bills)
3. Income Proof with the Last 6 months’ bank statement
4. Last 1 years ITR for existing enterprises
5. Business Incorporation/Establishment Certificate
6. Business Vintage and Address Proofs
7. Any other document required by the lender
Eligibility
1. The applicant has to be in business for last
3 years.
2. The business must have generated profit
for a minimum of 1 year
3. The applicant should be a Sole Proprietor /
Partnership firm / Private Ltd Co. / Trust /
LLP involved in the business of
Manufacturing, Trading or Services
4. The main applicant should be minimum of
25 years of age & should be no older than
65 years at the time of loan maturity

11. CAR LOANS
It’s a loans that allows potential buyers to pay off the vehicle
through EMIs where as bank pays full which is repaid by borrower
along with interest.
Eligibility
Age limit: The main applicant should be a minimum
of 21 years, co-applicant can be 18 years old. The
maximum age will be 65 years.
Employment type: Permanent Salaried or Self
Employed Applicant with 2-3 years of working
experience
Nationality and residence: The applicant should
reside in India or at least have a home in India (for
NRIs / OCIs / POIs).
CIBIL: The candidate should display good credit
history with a CIBIL score
Documentation
Identity proof (PAN card, Aadhaar card, Passport, or
Voter ID)
· Address proof (Aadhaar card, Driving License, or
Passport)
· Income proofs (current salary slips, latest Form 16,
current ITR)
· Latest 6 months’ bank statements
· New car dealer documents (Proforma invoice,
Insurance, Margin money, or Tax invoice)

12. HOME LOAN
Lender gives home loan against a property and in case of
default, the bank or lending company has legal rights to
side the property and recover the outstanding loan
amount.
Eligibility
• Age Limit for Salaried Individuals: 21 to 65
years .
• Minimum Salary: ₹10,000 p.m.
• Minimum business income: ₹2 lac p.a.
• Maximum Loan Term: 30 years.
• Financial Position: The present and the future
income of applicant(s) has a significant impact on
determining the loan amount.
Documentation
● Identify proof
● Residence proof
● Bank Account Statement/Passbook for last 6
months.
● Signature verification by bankers of the applicant.
● Liabilities statement and Personal Assets.
● Property detailed documents
● Salary Certificate (original) from employer. (salaried
individuals)
● Form 16/IT Returns for the past 2 financial years.
(salaried individuals)

13. EDUCATION LOAN
Education 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 repayement, lower
interest rates builds good credit history etc.
Eligiblity
● The candidate applying for the loan must be a resident of
India.
● He/she must have confirmed admission to recognised
educational institutes in India or abroad.
● The age of the candidate must fall within the bracket of
18 to 35 years during loan application.
● The applicant should have secured admission to a
college or university affiliated with University Grants
Commission (UGC)/All India Council for Technical
Education (AICTE)/Govt. etc.
● The co-applicant must have a regular income source.
Documentation
● Identity & Age proof
● Duly filled in and signed application form with
affixed photographs
● Copy of exam mark sheets of 10th / 12th or
latest education certificate
● Statement of course expenses / cost of study
● Aadhaar Card and Pan Card of the student
and Parent/ Guardian

14. Agriculture LOAN
To support farmers and promote agricultural growth, the Indian
government and financial institutions offer Agriculture Loan with
attractive interest rates, various schemes, and eligibility criteria tailored to
the needs of farmers
Eligiblity
Land Ownership: Farmers should have clear ownership of agricultural land or
possess leasehold rights for a minimum period specified by the lending
institution. The land is often used as collateral for the loan.
Age: Most institutions require the farmer to be at least 18 years old to apply for
an agriculture loan.
Credit History: Financial institutions typically consider the credit history of the
applicant to assess their credit worthiness.
Documentation
● Identity proof (Aadhaar card, PAN card, Voter ID, etc.)
● Address proof (Electricity bill, ration card, passport, etc.)
● Land ownership documents or land-related agreements
● Income proof (Income tax returns, bank statements, etc.)
● Crop details, including cultivation plans and expected
yields (if applicable)

15. Loan Providers In
India
Banking is the backbone of an economy, as it aids
in the economy's growth, trade, and investments,
ensures financial access for all, and provides loans
to individuals and businesses. With a tech-savvy
population and a booming economy, India's
banking sector has significantly evolved over the
past decade

16. HDFC BANK
AXIS BANK
ICICI BANK
BANK OF BARODA
STATE BANK OF
INDIA
INDUSIND BANK
KOTAK MAHINDRA
BANK
UNION BANK

17. Non Banking Financial Companies
Institutions that provide financial and banking
services without really matching the
requirements of a bank are known as non-
banking financial companies (NBFC). These
organisations are governed by the central bank
and are essential to a nation’s economic
development.

18. BAJAJ FINANCE
LIMITED
MUTHOOT
FINANCE
TATA CAPITAL
UPTO 70K
MAHINDRA
FINANCE
ADITYA BIRLA
CAPITAL
POWER FINANCE
CORPORATION
L & T FINANCIAL
SERVICES
SHRIRAM
FINANCE

19. RBI
REGULATIONS
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• All loan application forms must include required information
indicating the fees and payments. This will help borrowers to
compare with other banks and make informed decisions.
• The verification process must be over within a certain period of
time. And if the lender requires any additional information or
documentation, the applicant must be contacted immediately
without any delay.
• If the lender rejects the loan applications for amounts lesser than
Rs. 2 lakhs, they must convey the reason for loan rejection in
writing.

20. KYC Guidelines
The RBI stated that the banks must provide an acknowledgement
receipt of the KYC documents or self-declaration submitted by the
customers
The list of officially valid documents for completion of bank KYC
includes a passport, Aadhaar number, driving licence, voter’s
identity card.
Interest Rate Guidelines
All floating rate loans, except those mentioned in section 13, shall be priced with reference to the
benchmark indicated in chapter III.
(iii) Banks shall have the freedom to offer all categories of advances on fixed or floating interest rates.
(iv) When the floating rate advances are linked to an internal benchmark rate, banks shall determine their
actual lending rates by adding the components of spread to the internal benchmark rate.
The reference benchmark rate used for pricing the loans shall form part of the terms of the loan contract.
(vii) Interest shall be charged on all advances at monthly rests.

21. DIGITAL
LENDING
PLATFORMS
WHAT IS DIGITAL LENDING?
Digital lending is the service of providing loans and credit facilities
with the help of online platforms, digital technologies and data
analytics by assessing a borrower’s creditworthiness, and thus
approving and disbursing funds. It is fast becoming a popular
mode of credit delivery in the context of increasing digital
connectivity, services, and the culture of digital finance.

22. BENEFITS OF DIGITAL LENDING
PLATFORMS
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QUICK LOAN
APPROVAL
No long procedures
TIME SAVING
Within a few clicks
ECOSYSTEM
INTREGTATION
Paperless work
CONFIDENTIAL
Need not to ask friends
or family for small
favors
ECONOMICAL
Cost reduction due to
lesser involvement of
middlemen

23. DIFFERENT DIGITAL LENDING
PLATFORMS IN INDIA
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PAYTM MONEY
UPTO 2 LACS
BAJAJ FINSERV
UPTO 2 LACS
FLIPKART
UPTO 70K
POSTPE
UPTO 10 LACS
SIMPL PAY
UPTO 1 LAC
LENDINGKART
UPTO 2 CRORES
MOBIKWIK
UPTO 5 LACS
MONEYTAP
UPTO 5 LACS

24. IMPACT OF
DIGITAL LENDING
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• A boost to Small businesses.
• Birthed Contactless financing.
• Empowered
• Creation of a stronger regulatory
framework
• A better financially educated
nation

25. WHAT’S A CREDIT SCORE?
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• A credit score is a three digit numerical value which signifies the financial position & creditworthiness of
borrowers.
• It depends on various factors such as previous loan history, repayment time, type of credit used, delays and
default.
• It helps the lenders to know the real position of the borrowers to save them from possible loss and
bankruptcy.
• Higher the number, better the credit score.
• It is dynamic in nature, i.e. it keeps on changing constantly depending on the behaviour of the borrowers.
• With the advancement in technology, it has become much easier for the loan providers to assess a person’s
credit score efficiently.

26. Loan
Repayment
Loan repayment is the process of returning the
money you borrowed, typically in regular
installments or according to the agreed-upon
schedule.Consistent loan repayment helps
maintaining trust between borrowers and lenders and
it builds a positive credit history that helps in future
financial needs

27. EMI
Equated Monthly Installment
It's a way to pay back a loan or make a big purchase in small amounts monthly. EMI is
a win-win arrangement where customers can make purchases without a massive upfront
cost, and lenders secure a reliable method of repayment. (Add interest paid part)

28. Negative Consequences on Non-Repayment of loan
Issues that you might have to face on non-repayment of your Loan -
1) If you default on loan payments, your credit score can decrease by 50-70
points, which will impact your eligibility to borrow in the future.
2) A lender may go easy on you if you have missed only one or two EMI
payment, may charge you with some penalty but they can take legal action
against you if you default on loan re-payments for over 180 days. Under section
138 of the Negotiable Instruments Act 1881, the lender has the prerogative to
file a case against you in court and demand their money back.
3) In case of secure loan , When one fails to pay the loan repayment on time, the
bank/lender will decide to sell or auction the collateral such as jewellery, real
estate property.
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29. Two ways to recover loan 29
Non- Judicial way-
1) Lender can give him a moratorium wherein he
will not have to pay the EMI for a few months.
2) Lender can offer him a settlement amount ,
waiving off some interest amount and penalties.
3) If this was a secured loan , the lender may also
choose to sell the asset given as collateral to
recover the loan amount.
4) Lender may opt to send loan recovery agents.
Judicial way -
A criminal case can be filed against the defaulter, If
the borrower is deemed to be a wilful defaulter by-
1) Transfer of his asset & collateral without
lender’s knowledge.
2) If he has money and not paying willfully.
3) If he is using funds for other reasons than
those provided while availing the loan.

30. Vijay Mallya- He took loans of 9000 crores from 17 banks, his
company also did not pay the salary of its employees or ran out of
cash. In 2012 the company had to shut down its operation. Vijay
Mallya had a loan of 9000 from different banks and he denied to
pay this loan.
Nirav modi - .He and his uncle Mehul Choksi
created a complex web of deception through
fraudulent Letters of Undertaking (LoUs) to siphon
off Rs 14,000 crore from state-owned Punjab
National Bank.
Loan frauds & Scams