Loan Information
Learn everything you need to know about loans, types, how they work, repayment methods, and more.
What is a Loan?
A loan is a sum of money borrowed from a lender that is expected to be paid back with interest. Loans help individuals and businesses to meet financial needs such as buying a home, vehicle, managing emergencies, or expanding a business.
How Does a Loan Work?
- You apply for a specific amount and tenure.
- The lender evaluates your credit score and profile.
- If approved, the money is disbursed to your account.
- You repay the amount in monthly installments (EMIs) with interest.
- Once fully repaid, the loan account is closed.
Loan Types & Details
- 🏠 Home Loan: Long-term financing to buy, build or renovate a house.
- 🚗 Vehicle Loan: For purchasing two-wheelers or four-wheelers, new or used.
- 💼 Personal Loan: Unsecured loan used for personal needs like travel, wedding, etc.
- 🪙 Gold Loan: Secured loan by pledging gold jewelry or coins.
- 🏢 Mortgage Loan: High-value loan using property as collateral.
- 🎓 Education Loan: For higher education in India or abroad.
- 📈 Loan Against Securities: Borrow money while holding shares, bonds, or mutual funds.
- 👨🌾 Agricultural Loan: Short-term credit for farmers to buy seeds, fertilizers, and tools.
- 📲 Digital Loan: Quick, paperless loan processed through apps and platforms.
- 🏢 Business Loan: Funding for startup, working capital, or expansion.
How to Repay Your Loan Faster
- Choose a shorter tenure if affordable—it reduces interest cost.
- Make part-payments when you receive bonuses or extra income.
- Avoid unnecessary new loans while repaying an existing one.
- Try increasing your EMI gradually over time.
Benefits of Taking a Loan
- Access funds immediately for urgent needs.
- Helps improve credit score if repaid responsibly.
- Flexible repayment tenures available (from months to years).
- Tax benefits on interest paid (in some loan categories like home loans).
Eligibility & Documents
- Basic Criteria: Age between 21–60, stable income, good credit score.
- Documents: ID proof, address proof, income proof, bank statements, PAN card.
- For Business: ITR, GST returns, business registration documents.
FAQs
- Q: What is the minimum credit score required?
A: Generally 650+, but may vary by lender.
- Q: Can I pre-close my loan?
A: Yes, but some lenders may charge a penalty.
- Q: Will a loan affect my credit score?
A: Yes. Timely payments improve it, missed payments hurt it.
- Q: Can I apply online?
A: Yes. Most banks and apps support fully digital applications.