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PERSONAL LOAN

What is personal loan ?

Raj’s wife had to undergo her third bypass surgery and he has spent his entire savings already on her previous surgeries, what does he do next? He can take a personal loan from the bank for which there is no mortgage that he has to keep (girvi nahi rakna padta hai). Let’s say if you take a home loan or car loan (amounting in lakhs), how can the bank believe that you would repay them this huge sum of money? In this case the bank agrees to give you the loan by keeping your house as a security (collateral) if in any case you are unable to pay the loan, this is a secured loan. Personal loan is an unsecured loan, which means there is no collateral. As there is no security involved, loans are provided based on credit history. Have you made your payments on time in the past? If yes, well then you can avail personal loans easily. Best part of personal loans? The documentation is minimal, and approval is instant, sometimes within few hours, so Raj can get the loan sanctioned quickly. You can also take a personal loan for various other purposes like vacation, Home renovation, holidays, child’s marriage etc.
Eligibility for Personal Loan

The age of the applicant should be between 21-60 years at the time of applying; this may vary from different banks.

The required income varies from city to city, but the minimum required monthly income should be Rs 15,000 which varies from banks.

Applicant would need minimum 2 years of experience and should be part of the organization for more than 6 months.

Self Employed individual should have business continuity for minimum 3 years.

To be eligible for a personal loan you should be having a credit score of 700, some banks would want you to have a credit score of 750.

Special Schemes:
Banks offer customized personal loan interest rates and schemes for salaried borrowers working in government, defense, private or MNC companies. Banks offer personal loan to self-employed professionals like Doctors, CA, CS, Architects. Top banks have also launched special loan schemes to pensioners up to the age of 76 years.
EDUCATION LOAN
What is an Education Loan?
Education has always been one of the top priorities of our country. We all know India has the second largest population in the world. Recently released statistics says that the number of students in our country is a startling 315 million. It is every parent’s dream to give their children quality education, some parents can afford it, however parents from the low and middle income background cannot afford to give such hefty fees to the colleges or schools, in such case education loan comes into the picture.
Important points before taking an Education Loan
  • Any person from 16 to 35 year of age is eligible for taking education loan.
  • If you are taking an education loan, ensure that your admission in confirmed in that college or university.
  • One can get an education loan for graduate/post graduate course and for vocational training courses such as pilot and air hostess training.
  • If you are taking an education loan, availability of co-applicant is very important, co-applicant can be your parents, spouse or parents-in-law. Co-applicant is a form of security to the bank because there might be a chance that a student might not get placement, in such case bank tells the co-applicant to repay the loan.
Here’s what education loan covers:
  1. 100% college tuition fees
  2. Accommodation charges including mess fee
  3. Exam and library fees
  4. Books and equipment
  5. Travelling expenses
  6. Miscellaneous
Loan amount and collateral:
You can avail a loan up to 15 Lakh Rs for studying in India and a loan up to 75 Lakhs from a private bank if you are studying abroad. You can get a loan for a period of 3 -10 years; some banks offer loans for a period of 15 years as well. Banks do not ask for a collateral if you take a loan up to 4 lakh Rs but for amounts higher than that they usually ask for a collateral in form of property, Fixed deposit, life insurance etc.
Interest rate on education loan:
Interest rates on education loan differs from bank to bank and depends on the course or college you apply for. They are generally in the range of 8-12%. There are banks which gives different concessions for a girl applicant, or any candidate having work experience of more than 2 years, borrower offering high collateral as compared to the loan amount etc. Apart from banks there are many governments authorized education loan scheme which gives loan for the students. One of the best government authorized education loan portal is Vidyalaxmi. It is one of the best education loan portal in India authorized by the Government of India and managed by the NSDL E-governance infrastructure. This portal is linked with scheduled banks. The Portal is a gateway to the Banks through which the student can proceed further. The portal has the facility of tracking the Education Loan right from the inception of loan application to the sanction of loan or otherwise.
Loan disbursement:
Disbursement of loan is directly made to the college/institute the student has applied for. In case of hostel charges, the amount is directly given to the concerned authority. In case of air fare as well, the amount is given directly to the airlines. Some banks may give students some amount monthly or quarterly for purchasing books or other material.
What are the tax benefits?
The interest paid under education loan is allowed as a deduction under section 80E. The loan should be taken for higher education of self, spouse or children. Deductions can only be availed for 8 years; you cannot claim deductions beyond 8 years. This means if loan repayment is done in 6 years, then tax deduction will only be allowed for 6 years and not 8 years.
Important tips:
Do proper research on the college/university and the course you have applied for. Check if there is any placement guarantee from the university as you may land in problem if there is no placement guarantee and the loan amount is huge. Some institutes also have a loan tie-up with a bank, so make sure you inquire about the same so you can get loan at a cheaper rate. If you are studying abroad, you can avail loan from there. Ask institutes about it as loans abroad are quite cheap and can be as low as 3-5%. Always remember try to pay off your loan as early as possible, because if you take more time in paying off your loan your interest will also keep on increasing and that might be a huge burden in future. In case you are not getting an educational loan there are many other secured loan options like loan against property, loans against Fixed deposit, gold loan etc
HOME LOAN
What are Home Loans?

In India, Roti, Kapda aur Makan are the three basic needs of life. Things are becoming costlier in India as days pass and to think of having your own house in a posh locality of your choice is like expecting snowfall in Rajasthan in the month of May. Taking a loan in India is usually considered as an unnecessary burden. In India, Bollywood movies have created a negative perception about borrowing money. Owning your house is a dream of every individual. However, as the prices of real estate are rising our incomes are not rising at the same pace. This gap between our income and desire to buy a house is filled by home loans. Home Loan is a sum of money borrowed from banks, housing finance companies and Non-banking financial institutions to purchase or construct a house. With a home loan you can:

  • Buy an already constructed property
  • Renovate or Expand the existing property
  • Buy a plot of land.
  • Home loan is a secured loan. The house is a collateral till the loan is paid
Why avail Home Loan?

Banks are competing to offer you reasonable and attractive interest rates for your home loan.

Depending on your eligibility, income and repayment capacity you can avail home loans from anywhere between 2 Lakhs to 20 Crores.

The maximum loan tenure is 30 years.

You get tax benefits on your interest payment (Maximum Rs 2 Lakh) under section 24 and principal amount (Maximum Rs 1.5 Lakhs) under section 80C.

One of the major reasons to invest in property is the rise in prices over a period. Rents payments also increase and manage to keep up with inflation, which acts vital as a secondary source of income.