Loans in India

Here is a complete guide to gather information regarding loans in India which will help you in availing car loans, educational loans, home loans, study loans, secured & unsecured loans, and personal loans.

Educational Loans

Educational loans in India are, broadly, of two types - loans for studies within the country, and loans for studying abroad.

Usually, loans can be availed for higher studies like MBA or a PG course, and they are usually given against a guarantor, who may be the parent or a guardian. Loan rates for education in India are almost similar in every bank except for slight differences. One can get a loan for education at 10-14 percent rate of interest, with amounts varying from four to ten lakhs. The maximum time to repay the loan is around seven years. Students can start paying the loan after getting their first salary, and they are not pressurized to repay immediately after the completion of studies. Education loans come as an angel’s blessings to middle-class families, reliving them of stress and offering them a solution to the issue of high tuition fees if they can’t afford to send give their children the opportunity to study.

Loan Syndication

Loan syndication is a process where finance lenders will come together to share the financial risk to fund a particular project. Loan syndication might cost you more. By doing so, financial institutions or banks can control the situation, where there will be a huge loss if the projects fail. There will always be a small processing fee associated with such loans.Corporate giants in India, and other major industries such as mining companies, development institutions and oil refineries feel a strong need for loan syndication.

Small Business Loans

You’ll need funds to start a business, be it small or big. While big businesses can easily find investors and venture capitalists, it’s very tough to get funding for startup companies; business returns are not stable, sometimes people experience huge profits or losses as well. Small business loans can be used for various purposes, like starting a new business, expanding an existing line of business, purchasing new equipments and machineries, upgrading the technology, and regularizing the business capital.

Secured small business loan is approved against collateral and non secured small business loans are approved without the need of collateral. Interest rates depend upon the business size and type, and may vary from 14-20%.

Housing Loans

Housing loans are also known as secured loans, and loan amounts ranging from as low as Rs. 1 lakh to the order of several crores can be availed for constructing your dream home. The borrower has to show guarantee and financial credibility to avail a home loan.

Different lenders offer different rates of interest. Hence, the borrower must be aware of the interest rates prevailing in the market. In our country, both floating interest rate and fixed interest rates are offered to borrowers. SBI & LIC are the two most trustworthy names in the home loan sector, though private banks such as HDFC, ICICI, Tata Capital, Kotak, Yes Bank, Axis Bank, HSBC, Citibank, and the likes of them, are also offering home loans at equally attractive rates of interest.