Press Release Summary: Loans are a banking function these days purely to fund expansion of businesses and to help individuals achieve their goals.
Press Release Body: The loans come in two categories. They are loan meant for individuals and loans meant for business houses. These two are the general classifications followed by the banks. Within these two broad categories, there are other sub categories.
Under the individual loans, there are personal loans, housing loans, vehicle loans, business loans, house improvement loans and many more. The personal loans are given to people, who are salaried and have clean credit at least over a period of three years. Their bank balance should not indicate any discrepancy or poor credit history. The personal loans are given for short duration and the money given is the lowest. The reasons for this are many. The bank cannot accept anything as the collateral for the personal loan. Further, the interest rate is high when compared to other forms of loan. Though banks seek collateral for personal loans, most of the times, it is sanctioned without the collateral since the loan amount is less compared to other forms of loan.
The housing loan is the most sought after loan by people these days. Housing loan is advanced towards purchase of a house or a residential plot. The funding is to the extent of seventy per cent of the cost of the house. As collateral, the borrower has to deposit the sale deed with the bank or execute the ownership to the bank till the time the loan is repaid. However, if the loan is not repaid in time, the bank will have the right to auction the property and reclaim the loan amount due to it. The interest rate for a housing loan is low when compared to a personal loan. It is the most selling of loans when compared to all other types. The compliance is also very high since people have the fear of losing their property to the bank. Besides, the repayment option is flexible and the loan is recovered within the first ten years. Sometimes, the repayment option is further narrowed down depending on the choice of the customer.
The house improvement loan is slightly better when compared to the personal loan. Though the house has to be pledged as collateral with the bank, the loan offered is two third of the housing loan. Generally, the house improvement loan has to be cleared at the earliest by the borrower. The interest rate is higher than that of the housing loan. The fourth form of individual loan is the vehicle loan, which has the highest interest rate among all the retail loans. The loans are offered to both new cars and used cars. The loan for new car is given up to eight per cent of the cost of the vehicle. It has to be hypothecated to the bank, which has provided the loan. The interest rate for a brand new car is also less. The auto loan given to used cars or pre-owned cars is up to fifty per cent or more value of the car. However, the interest rate is higher when compared to the new car loan considering age of the car.
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2022
