Benefits of Different Loans in India
Last Updated : Aug. 24, 2020, 7:11 p.m.
People opt for a loan to meet their needs when they don’t have the required savings to do so. There are several Banks, Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) that provide different types of loans to customers. From buying the latest smartphone to buying the desired house, there is a loan available for you. Also, there are several additional benefits of different loans that people can enjoy.
There are different kinds of loans in India but it can be divided into two sections – Secured Loans and Unsecured Loans. Some of the popular ones are Personal Loans, Home Loans, Loan Against Property, Vehicle Loans, Gold Loans, etc. Each loan provides unique benefits to customers with which they can fulfill their needs easily. Some of them are Instant Approval, Lower Interest Rates, Higher Loan Amount, Faster Turnaround, Abundance of options to choose from, etc.
This article will be solely focused on the benefits of different loans in India so that you can understand the privileges you can enjoy when you opt for anyone. So, without any further delay, let’s get to it.
Different Kinds of Loans and Their Benefits
As we said, loans can be mainly divided into two types, Secured Loans (Home Loan, Gold Loan, Loan Against Property, etc.) and Unsecured Loans (Personal Loan). The basic difference between Secured and Unsecured Loan is the collateral or security. You will need to submit collateral against the loan amount in the case of Secured Loans, while unsecured loans will be collateral-free. Coming to the benefits, we are showing all the benefits of different loans in India. First, we will talk about the Home Loan. Do check out.
Benefits of Home Loans
A Home Loan is one of the most popular loan products among customers. It enables people to opt for a loan amount at affordable interest rates with which they can buy their dream home. The loan can be repaid over a fixed tenure with the help of monthly installments. We are showing some of the most prominent benefits of Home Loans below. Have a look.
- The most amazing benefit of a Home Loan is its affordable interest rates that range from 7% to 9% per annum on average now. Lower interest rates mean lower repayment amount and vice versa. Remember, interest rates vary from one lender to another.
- Home Loans can be taken for various purposes such as Construction, Renovation, Extension, Repair, etc.
- Customers can also get a high loan amount as it ranges from 75% to 90% of the overall property value.
- Among the benefits of different loans, the reason why a home loan is so special is the wide range of options you have when it comes to choosing the lender. A customer has so many options to choose from as almost everyone provides a home loan ranging from Banks to HFCs to NBFCs.
- A home loan also provides tax benefits to the customers as they can avail of a deduction of upto INR 1.5 lakh on the principal amount and upto INR 2 lakh interest payment of the home loan under Section 80C and Section 24 of the Income Tax Act, respectively.
- Other than this, people from Middle Income Group (Annual Income from INR 6 lakh to INR 18 lakh) can also get a subsidy upto INR 2.35 lakh with the help of Pradhan Mantri Awas Yojana (PMAY). With this, they will pay a lower EMI amount. The interest payment will also reduce over time.
Home Loan Interest Rates of Top Lenders
| Lenders | Rate of Interest (In per annum) |
|---|---|
| State Bank of India (SBI) | 9.15% - 11.30% |
| Axis Bank | 8.75% - 9.15% |
| ICICI Bank | 9.00% - 10.05% |
| Bank of Baroda | 8.50% - 10.60% |
| LIC Housing Finance (LIC HFL) | 8.50% - 10.75% |
| Tata Capital | 8.95% - 12.00% |
| Indiabulls Housing Finance | 9.30% Onwards |
| Bank of India | 8.85% onwards |
| PNB Housing Finance (PNBHFL) | 8.50% - 11.95% |
| Piramal Capital & Housing Finance (PCHF) | 10.50% Onwards |
Benefits of Personal Loans
Personal loans remain the top choice of customers when it is about fulfilling their different types of needs. Whether it is about funding a child’s marriage or education, buying the new iPhone in the market, funding your trip abroad, or anything else, a personal loan is available for all these. Personal loans are usually given for a maximum of 5 years. We are showing some of the important benefits of it below. Do check them.
- When we are talking about the benefits of different loans in India, the most unique thing about a personal loan is that a customer can get the loan amount without pledging any security or collateral.
- Due to short term repayment tenure, you can choose it according to your repayment capacity and monthly income.
- Lenders approve the personal loan instantly if an individual is eligible for the loan. The approval and loan disbursal time is quite faster as compared to other loans. So, in times of emergency, personal loans are considered ideal.
- You don’t need to provide a long list of documents. Just submit a few basic KYC Documents, Income Proof, and you’re good to go.
- Personal loans can be useful in improving credit score if an individual pays his or her EMIs on time.
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Personal Loan Interest Rates of Top Lenders
| Lenders | Rate of Interest (In per annum) |
|---|---|
| State Bank of India (SBI) | 11.00% - 14.00% |
| HDFC Bank | 10.75% - 14.50% |
| ICICI Bank | 10.75% - 19.00% |
| IndusInd Bank | 10.25% - 26.00% |
| Standard Chartered Bank | 11.49% Onwards |
| Tata Capital | 10.50% - 24.00% |
| Kotak Mahindra Bank | 10.99% Onwards |
| Bank of Baroda | 10.90% - 18.25% |
| Punjab National Bank (PNB) | 11.40% - 16.95% |
| Central Bank of India | 12.30% |
Benefits of Gold Loans
Do you know that Gold Jewellery sitting idle in your home locker can get you a required sum of money? Well, with a Gold Loan, this can be possible. Several banks and financial institutions provide a Gold Loan to customers to meet their several requirements. Just submit your Gold Ornaments or Coins to the lender and get a loan against the submitted possession. When talking about the benefits of different loans, a Gold Loan also provides a few prominent benefits that customers enjoy. We are showing them below. Have a look.
- Due to its secured nature, Gold Loan Interest Rates are quite low ranging from 10% to 16% per annum on average. It helps customers repay the loan amount without putting any strain on their budget.
- Gold Loan amount depends on the overall price of the Gold. Higher the Gold prices, the higher will be the loan amount. Though lenders provide a maximum loan amount upto 65%-90% of the overall gold price.
- Gold Loan lets you enjoy the flexibility when it comes to repayment options as there are a total of 4 repayment options you can choose from – Bullet Repayment, EMI Payment, Interest Payout at Regular Intervals, and Interest Payment at the end of tenure.
- Since Gold Loans are secured loans, eligibility norms are pretty lenient. People with bad credit scores can also opt for a gold loan.
- Your gold remains safe at the lender’s full proof vault without any extra cost for you. You will get your pledged gold back once you repay the loan.
Gold Loan Interest Rates of Top Lenders
| Gold Loan Lenders | Interest Rates (In Per Annum) |
|---|---|
| Muthoot Finance | 12.00% - 27.00% |
| ICICI Bank | 10.00% - 19.76% |
| HDFC Bank | 9.50% - 17.55% |
| State Bank of India (SBI) | 7.50% |
| Manappuram Finance | 12.00% - 29.00% |
| Union Bank of India | 7.00% - 9.60% |
| Axis Bank | 13.00% |
| YES BANK | 9.00% - 15.00% |
| Kotak Mahindra Bank | 10.50% - 17.00% |
| Canara Bank | 7.65% |
Benefits of Loan Against Property
Loan Against Property is also one of the common secured loans having a wide range of benefits for borrowers. With this loan facility, customers can avail of a loan amount by putting their property as security. We are showing some of the benefits of Loan Against Property below. Please check.
- Loan Against Property is a secured loan, which makes the interest rates (comparatively lower to other loans) for customers who are looking to get money urgently. Generally, Loan Against property interest rates range from 8% to 13% per annum on average.
- Loan Amount also ranges from 65% to 70% of the overall property value. Though this Loan-to-value ratio varies from one lender to another.
- Customers also get longer repayment tenure of upto 20 years within which they can easily repay the loan amount via EMIs.
- The customer will have the ownership of the property despite opting for a loan against property. He or she can continue to own and use the property. You only need to pay the EMIs on time to save yourself from any trouble.
Loan Against Property Interest Rates of Top Lenders
| Lenders | Rate of Interest (In per annum) |
|---|---|
| Axis Bank | 10.50% - 11.25% |
| HDFC Ltd. | 8.75% - 10.40% |
| ICICI Bank | 8.35% - 9.50% |
| Union Bank of India | 8.40% - 10.65% |
| Bank of India | 8.85% - 9.35% |
| SBI | 7.00% - 7.70% |
| United Bank of India | 8.70% - 9.80% |
| Standard Chartered Bank | 9.65% - 10.05% |
| Punjab & Sind Bank | 9.35% - 9.70% |
| Bank of Baroda | 8.20% - 13.35% |
Benefits of Car Loans
With the help of a Car Loan , customers fulfill their dream of owning a car. Other than personal conveyance, many people are earning their daily income from a Car. Several lenders provide a Car Loan to those customers who don’t have enough money to buy a car. Customers can buy both new cars and pre-used cards without any hassle. To know some of the additional benefits of a Car Loan, have a look at the below-mentioned points.
- With a Car Loan, customers can get a loan amount upto 85% to 90% of the on-road price of the car. You will need to manage the remaining amount from your own sources.
- Car Loan Interest Rates range from 7% to 14% per annum which is an added benefit. Due to affordable interest rates, customers can easily pay the EMIs.
- Lenders provide a maximum of 7 years to repay the loan amount. Customers can choose the tenure according to their convenience.
- Car Loan can also help you get the Tax Benefits if you are a self-employed professional or owner of a business and using the car for business purposes. If you are a salaried employee, you cannot get tax benefits, as it is considered to be luxury. Among the benefits of different loans, this is one of the top benefits of a Car Loan.
Car Loan Interest Rates of Top Lenders
| Lenders | Interest Rate (In per annum) |
|---|---|
| SBI | 7.20% - 7.90% |
| Bank of Baroda | 7% onwards |
| Punjab National Bank | 6.50% Onwards |
| ICICI Bank | 7.90% Onwards |
| HDFC Bank | 7.95% - 8.30% |
| Bank of India | 6.85% onwards |
| IDBI Bank | 7.50% Onwards |
| Jammu and Kashmir Bank | 7.85% Onwards |
| Union Bank of India | 7.80% - 7.90% |
| Central Bank of India | 7.25% - 7.70% |