Many times in life such circumstances surface when you need money and demands like those can’t be overlooked. Demands like owning a home, like for renovating house or a car are certain things for which you need a personal loan.
Personal loans are usually very expensive tool of finance. You can avail the loan up to 5-10 lacs, with no security/guarantor required, customers with good credibility can get loans at attractive interest rates with minimum documentation. It can be repaid from 12-60 months. At present, government financial bodies like SBI and Bank Of India, are providing personal loans up to 6 lakhs with high rate of interest of 16 % and 12.5%, respectively while private banking entities like ICICI and HDFC are offering personal loan up to 5.65 lakhs with interest rate of 14-19 % and 16-16.5%, respectively. These banks usually charge 2 % of the loan amount as a loan processing fees.
Owning a house features high on a common man’s wish-list but it is really difficult in current scenario with a high inflation rate. Buying a house is not that easy as it was some fifty years ago. Real estate and the basic cost of living have increased by leaps and bounds. But a good home loan deal holds the key. Nowadays, every bank is offering home loans against borrower’s good credibility record. These loans basically come with a Free Personal Accident Insurance Policy. Government banks like LIC and SBI are offering loans in range of Rs. 5-20 lakhs at 8.5 % and 8 % rate of interest, respectively available in both fixed and floating pattern. While leading private banks like HDFC and ICICI offer loan in same range at 9 % and 9.25 % respectively in both floating and fixed rate pattern. Loans are available for tenures up to 25 years. Usually, banks charge 1% of the loan amount applied plus applicable service taxes and cess as loan processing fees.
There are many financial competitors in the market who provide loans, so getting a car loan is not very difficult. However, if you want to get a car loan or an auto loan at a reasonable rate of interest, then you should have an adequate credit score with a good credit history. Riding in a brand new car loaded with all the latest car gadgets is every person’s dream and opting for a personal car loan can help in fulfilling the dream.
Before finalizing the deal with the bank, check out the ROI, terms and conditions, and other schemes offered by the bank. There are basically two types of car loans – short-term and long-term loans. In a short-term loan, you would have to pay a lower rate of interest but the monthly instalments would be a huge amount. Whereas, if you apply for a long-term car loan, you get a longer duration (3 to 5 years) for repaying the loan and the monthly installments will certainly be small. However, you would end up paying more interest than short-term loans. It is up to you to decide which type of loan is good for you, depending on your current financial status.