Overview

A loan is an amount of money one or more individuals, businesses, or banks may borrow to manage planned or unplanned events financially. This means that the creditor takes on a loan that it has to repay over a defined time and with interest.

Types of Loans

  • Home Loan
  • Car Loan
  • Education Loan
  • Personal Loan
  • Business Loan
  • Gold Loan
  • Micro Loan
  • Instant Loan

Features and benefits of loans

Financial Flexibility

Loans help you to fulfill your financial needs or lifetime expenses. A loan provides you with some financial flexibility to make large payments and to take care of once-in-a-lifetime costs without altering your projected budget.

Easy Availability

All forms of loans are accepted in as little as 48 hours depending on the borrower’s income and financial background, as well as the collateral to be attached in certain cases.

Get Required Amount

The sum you need as a loan will be disbursed to you based on your income and financial background.

Convenient Tenure

A loan has a long repayment period, based on the bank and the amount. Loans are typically available for terms ranging from 12 months to 60 months or more.

Tax Benefits

According to the Income Tax Act of 1961, almost all forms of loans have tax advantages that you can take advantage of.

Considerations Before Applying for a Loan

Credit score

You should review your credit history before applying for a loan. Credit history is a record of your past borrowings and repayment history if any. A credit score of 750 or higher is excellent.

Rate of Interest

Before you apply for a loan, look at the interest rate. Loans that need collateral typically have lower interest rates than loans that do not.

Processing Fee

You will probably incur a processing fee and an interest fee if you apply for a loan and miss the payment deadlines for your loan. The payments depend on the size of the loan and the bank.

Documents for Loan Application

Salaried

  • Application profile with photograph
  • Identity and Residence proof
  • Last 6 months bank statements
  • Processing fee cheque
  • Latest Salary Slip
  • Form 16

Self-Employed

  • Application profile with photograph
  • Identity and Residence proof
  • Last 6 months bank statements
  • Processing fee cheque
  • Proof of Business
  • Business Profile and Previous 3 years Income Tax returns (self and business)
  • Previous 3 years Profit/Loss and Balance Sheet