Loan - Apply For Best Loan Offers From BankKaro

A financial crisis can come about at any time, which is what we have learnt through recent global events. In such situations, obtaining a loan is the most convenient way to cope with the shortage of money. But because of the sheer volume and popularity, the banks have classified loans into different categories. There is a range of loans where the influx of money can be used for different purposes. With so many available options, the question arises - “How do you pick the right one for you?” To find the best loan, read below! This is the ultimate guide to loans. Here you will find what a loan is, different types of loans, how to apply, the documents required, important factors to consider, and more. All information that you need on loans is mentioned below.

What Is A Loan?

The loan is the borrowed money that you promise to return within a specific period of time. In simpler words, it is the financial assistance that you take from your friends and family or financial institutions like Banks, NBFCs, etc. There might be different reasons behind obtaining the loans, which are taken for a defined tenure. Also, the payable loan amount includes the rate of interest that the lender and borrower agree upon.

What Are the Types Of Loans Available Online?

With the rise in the cost of living, people are often falling short of funds. This makes them ask for financial help in fulfilling different needs. With this in mind, financial institutions provide different kinds of loans for all age groups and purposes. Let's move ahead with the types of loans.

1. Secured Loans

Loans that are backed by collateral are known as secured loans. In such a type of loan, the borrower pledges an asset as security for the money, and the amount is decided on the basis of the collateral value. These secured loans are further classified into different types. These include:

• Home Loans: A home loan is a loan where money is obtained to buy a brand-new home, renovate the existing property, or expand the home by building extra space.
• Gold Loans: The quickest and easiest form of loan, gold loan, can be availed at a much lesser rate of interest. It requires gold jewellery or coins to be pledged as collateral against the amount.
• Vehicle Loans: It is a type of loan where the vehicle serves as collateral for the loan. The vehicle you intend to purchase can be used as security and will get sized in case of default.
• Loans Against Property: Another most common type of secured loan, a home loan, is provided by banks and NBFCs against the property, which can be residential, commercial, or a plot. In such a kind of loan, the amount can be used for business or personal needs.
• Loans Against Fixed Deposit: When you have a fixed deposit in the bank, you can avail loan against it. In this type of loan, the tenure is equal to the tenure of FD. However, the interest rate levied on the loan is usually more than the interest rate of FD.

2. Unsecured Loans

Next, we have unsecured loans that do not involve collateral. This kind of loan can be availed for a variety of purposes and relies on the creditworthiness of the borrower. Since the only assurance a lender has is the word of the buyer, it is a high-risk loan as compared to secured loans.

• Personal Loan: If you are searching for quick and short-term money, a personal loan is what you should get. It is a loan that can be used to cover multiple expenses like weddings, travelling, shopping, medical, etc
• Educational Loan: As the name suggests, Educational Loan is a loan to support students in pursuing their academic dreams. It facilitates young minds who are deprived of finances for higher education.
• Short-term Business Loan: This is another type of unsecured loan that is used to cover different expenses of the business. It is usually taken for the growth and expansion of a start-up business
• Buy Now Pay Later Loan: It is a short-term financing loan that allows users to make purchases in the present and pay for them in future. This kind of loan is often interest-free and obtained while shopping online.

Benefits Of Applying For A Loan Through BankKaro

BankKaro is a one-stop solution for all your financial needs. It has a simple and eye-pleasing interface that helps in making financial decisions a little easier. Using this platform, you can sort through loan and credit card options and enjoy other benefits like cashback, rewards, vouchers, etc. If you are wondering why you should apply for a loan through BankKaro, have a look at some of the benefits.

• Real Cashback: BankKaro provides its users with REAL CASHBACK on every successful approval of loan application. Every time you apply for a loan, you will receive free money, which you can transfer to your account or redeem as an Amazon gift card.
• Gift Vouchers: Perks of using BankKaro are not just limited to cashback. On signup on our website, you will also get gift vouchers worth thousands of rupees across different brands like Ajio, Lenskart, Mamaearth, and more. To unlock these, just complete your profile, submit your details, and start using them on your favourite websites.
• Free Credit Score: Apart from real cashback and gift vouchers, you can access your credit score for free! Every month you can refresh your score for free with BankKaro and get access to the latest credit card cashback offers running at the time.

To get your hands on these benefits, all you need to do is to sign up with BankKaro!

List Of Banks Issuing Loans With Best Interest Rates

1. HDFC Bank

HDFC is one of the biggest banks in India that provides loans for different purposes. It has a wide range of loan products to help you achieve all your dreams. From home loans to personal loans and loans against a credit card, HDFC covers it all. Apart from this, the bank provides attractive interest rates, flexible repayment options and tenures, minimal documentation, quick disbursals, and fewer charges.

2. SBI Bank

SBI is another renowned name in the banking industry in India. It has an exclusive range of loan options ensuring something for everyone. Apart from a wide product range, it offers several benefits to the users, like overdraft, low-interest rates, low processing fees, zero prepayment penalty, etc. This largest mortgage lender has helped over 30 lakh families to achieve their dreams without worrying about their finances.

3. ICICI Bank

ICICI is one of the largest private players that offer a wide variety of loans to suit each one of your requirements. All its loans are highly beneficial and ensure quick approval for an easy borrowing experience. It offers loans at attractive interest rates and low EMI. Also, its digital sanction and less documentation make the process much easier. Apart from the popular home loans, gold loans, and personal loans, the bank has a range of other options like Agri and Rural Finance, Commercial Business Loans, Healthcare Equipment loans, etc.

4. Axis Bank

This is another big private player on the list that offers ample loans, from car loans to loans against property to holiday loans and more. Axis bank offers customised loans at competitive interest rates for a better experience. To attract more and more customers, it allows online applications just by following a few simple steps and offers comfortable repayment tenures.

5. Kotak Mahindra Bank

To suit the needs of every individual, Kotak Mahindra Bank has an exclusive range of loan options that are available at attractive interest rates. Kotak Mahindra ensures quick loan sanction with simplified documentation. It has no hidden cost and changes minimal or no processing fee to help you save more on your loan. Its tailored made finance schemes are great for funding your requirements.

Tips To Get More Loan Amount Sanctioned

There is no pre-defined loan amount by any bank. It is decided by the lender on the basis of the application, attached documents, and several different factors. However, by following a few simple tips, you can increase your loan amount.

• Repay your existing loan: Clearing your existing debt obligations might help you get a higher loan amount. Lesser the debt obligations, the more disposable income you will be left with to repay the higher amount of loan.
• Build a good credit score: Your credibility has an incredible impact on your loan amount. While there is no fixed credit score defined by the bank, it is preferred to have a score of 600 or more. However, if you have a lesser score, you can improve it by making timely payments, reducing your debt burden, etc. This is how you can indicate your seriousness towards loan repayment and get a higher amount sanctioned.
• Apply at a younger age: Most of the banks in India offer loans to individuals of age 21 to 65 years. However, if you avail of a loan at a younger age, your employment tenure will be more, and you will get extra time to repay the amount. Hence, you might get eligible for more amount of loans.
• Improve financial stability: As a deciding factor, banks take into consideration the current and past employment or financial status of the applicant. This tells the repayment capacity of the applicant, and hence, by having a secure job and a stable financial condition, you might ask the bank for a higher amount.

Eligibility Criteria

Before you move ahead with the application for the loan, it is important to fulfil the eligibility criteria. These criteria qualify you and ensure successful approval. Following are some of the basic requirements for the loan.

• Occupation: Both salaried and self-employed individuals can apply for the loan. While there is no set income, it varies with the type of loan you are applying for. However, the more the income, the higher the amount of loan you will get.
• Age Group: Age is an important factor that affects the application for a loan. In general, the age limit for the loan is between 21-65 years. However, some banks might relax it to 18 years in case of short-term, low-amount loans.
• Credit Score: Credit score is another consideration that you can’t neglect. Your score might affect the loan amount, and hence, it is important to maintain a good score. While it is not specifically stated anywhere, the fundamental rule of thumb implies that the higher the credit score, the greater the amount sanctioned on loan.
• Nationality: Most of the loans require Indian nationality for the application. However, there are a few loans for non-Indian residents too.

Documents Required

There is a list of documents that are required to be submitted while applying for the loan. While these documents might vary across lenders on the basis of the type of loan, amount of loan, credit profile, etc., here is a general list of documents that every bank accepts.

Identity Proof

• PAN Card
• Aadhaar Card
• Driving Licence
• Passport
• Voter ID Card

Address Proof

• Passport
• Driving Licence
• Ration Card
• Electricity Bill
• Voter ID Card
• Telephone Bill
• Bank statement

Income Proof

• Latest salary payslips
• Income Tax Return (ITR)
• Form 16
• PAN Card
• Proof of business continuity

Age Proof

• Birth Certificate
• 10th Standard School Certificate
• Voter ID Card
• Passport

Fees And Charges

There are multiple fees and charges that are involved with loans in India. Before you apply for a loan, you must be aware of these charges. Let's go through each one and learn what all charges are levied over loans.

• Interest Rate: One of the most common charges on loans is the interest rate. It is a charge that a borrower is liable to pay until the entire amount is repaid. The interest rate is charged over the principal loan amount and varies with the type of loan. In short, it is the cost of debt for the borrower and return for the lender.
• Prepayment Charges: Prepayment charges are the penalty or charges that the lender asks the borrower to pay if he or she decides to pay all or a part of the loan before the completion of the tenure. Since banks earn through the difference between the deposit interest rate and the interest rate they receive, paying off the loan amount cuts off their income. This is why they charge a prepayment fee from the borrower.
• Processing Charges: For processing and sanctioning the loan, the bank has to bear the administrative cost, and this cost is charged to the borrower in the form of a processing fee. It is usually small in value but varies from bank to bank. In general, it is 0.5% to 2.50% of the total amount of the loan.
• Late payment charges: The interest of the loan is required to be paid every month or quarter, as per the agreement. However, defaulting in paying the amount will require the borrower to pay the penalty. Every bank has fixed charges for late payment, which is usually in the range of Rs 500 to Rs 1,000.