Looking for a loan but not sure which one fits your need? Here is a simple guide to the most common types of loans available in India, what each one is for, and what you usually need to apply.
1. Home loan
A home loan helps you buy a house or flat, build on your own plot, or extend and finish your home. It is usually the largest loan a family takes, with a long repayment period of up to 20 or 30 years.
- Best for: buying, building or improving a home
- Usually needed: Aadhaar, PAN, income proof, bank statements and property papers
2. Car loan
A car loan covers most of the price of a new or used car. The car itself is the security for the loan until it is fully repaid, and repayment usually runs from 3 to 7 years.
- Best for: buying a new or used car
- Usually needed: Aadhaar, PAN, income proof, bank statements and the car quotation
3. Personal loan
A personal loan can be used for almost any need: medical bills, education, travel or a wedding. It usually needs no security, so the lender looks closely at your income and credit (CIBIL) score.
- Best for: personal needs without pledging property or gold
- Usually needed: Aadhaar, PAN, salary slips or income proof and bank statements
4. Mortgage loan (loan against property)
A mortgage loan lets you borrow against property you already own, such as a house, shop or land. Because the property is the security, the amount can be larger than a personal loan.
- Best for: business needs or large personal expenses
- Usually needed: Aadhaar, PAN, property documents, income proof and bank statements
5. Gold loan
A gold loan is a quick loan against your gold ornaments. The amount depends on the weight and purity of the gold, and it is often one of the fastest loans to get.
- Best for: urgent, short-term needs
- Usually needed: Aadhaar, PAN and your gold ornaments
Which loan is right for you?
It depends on what the money is for, how much you need, how fast you need it and what you can offer as security. Every lender has its own rules, and the lender decides the approval, amount and interest rate.
If you are not sure where to start, message us on WhatsApp. Tell us what you need and we will guide you through the documents and the next steps.