Loan

It has not been very long that the online loan application process has made entry in India and with that a lot of hassles have been reduced. Individuals can now apply for online loan from anywhere without having to visit the bank or NBFC. Here is why one can opt for Online Loan application –

1. Quick Approval – The main advantage of the Online Lenders is that their process is instant. You will get notified in minutes whether your Loan Application is approved or rejected. But once the application is approved, the Loan Amount is disbursed in just a few hours.
2. Better Interest Rates – In most cases, online lenders have lower Interest Rate and smaller service charge and fees.
3. Extra Security – While applying Loans online, there is a tracking process for your Loan Application. So, post applying for a loan, you can see in which stage your loan application is at and the time it will take for approval.
4. Comparison Option – Apply for a loan physically at a bank, means you have to avail the loan amount only from that particular lender. Online applications give you a wide range of options to avail loans or credit cards and you can accordingly decide what will suit your financial requirements.
5. Speedy and Hassle-free – Online Loans are convenient, one does not need to carry bundle of documents to the financial institution. All that one needs are the exact set of documents set by the particular bank or NBFC and the Loan Application is further processed with a speedy timeline.

In order to avail a one, you can either apply online or offline. Before you apply for a Loan, consider some of the points shared below:

• Decide how much Loan Amount you need – This is a very important step where one needs to decide the Loan Amount. Often Loan Applicants tend to apply for a bigger loan amount and then realize it wasn’t needed and end up paying more Interest Rate on that.
• Check your Credit Score – Before you apply for any loan, it is advisable that you have a look at your credit score. The credit score will give you a fair idea of how much Loan Amount can you borrow. Lenders before approving your loan, will take into account the financial history which includes your credit score. The chances of approval of the loan become higher if the repayment cycle in the past has been clear and on time.
• Research and find the right Loan – Applying for any loan requires a lot of research. Check the Interest Rates, Loan Terms and Conditions before signing any Loan Documents.
• Once the above points are taken care of, you can apply for a loan online or offline depending on your convenience. You can visit the Bank’s website or log on to paisabazaar.com to get a detailed analysis on the Loan you want to opt for.

There are different types of Loans that one can opt for which are suitable for all age groups, be it for students, Women, for Business Individuals, Personal use, etc. Below are some of the Loans that can help you with your financial decision.

1. Home Loan
2. Education Loan
3. Car Loan
4. Personal Loan
5. Gold Loan
6. Business Loan
7. MUDRA Loan
8. Agricultural loan for farmers
9. NABARD
10. CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)

• Home Loan –  Home Loan is an amount which is borrowed from Banks or NBFCs (Non-Banking Financial Company) to buy a house. The Loan Applicant can apply for a Home Loan from the financial institution and pay every month as EMI at a particular rate of interest.

The rate of Interest for Home Loans can be fixed as well as floating. By fixed Interest Rate it implies that the rate of interest is fixed and that the Loan Applicant will pay only fixed interest percentage for the entire Loan Tenure. On the other hand, floating rate of interest means the interest can keep changing according to the current Market Conditions. One of the main difference between the fixed and floating rate is that floating rate of interests are cheaper in comparison to fixed interest rate. Some of the major banks and NBFCs that provide Home Loan are State Bank of India, HDFC Bank, ICICI Bank, PNB Housing Finance, Axis Bank, Indiabulls Housing Finance etc, with Bank of Baroda providing with the lowest Interest Rate of 8.65% onwards

Below is the Document Checklist that is required while applying for a Home Loan in India:

Eligibility criteria for a Home Loan will help you in knowing whether you are eligible to apply for that loan or what is it that needs to be done to fall in the Bank’s eligibility criteria:

1. Home Loan can be availed for salaried as well as self-employed individuals
2. The minimum age for Salaried professional is 21 years and for self employed it is 24 years
3. Loan Applicant needs to have a regular source of income since it becomes easier for the lender to assess the capacity of the Loan Applicant.

• Education Loan– Education Loan can be opted for students who wish to pursue higher education in India or in Abroad. At present, almost every bank or NBFC provides Education Loan for graduate, post graduate, professional or doctoral courses. Some of the leading Education Loan providers are Avanse, State Bank of India, Punjab National Bank, Union Bank, Axis Bank, Dhanlaxmi Bank, HDFC Credila etc.

To apply for Education Loan, here is the checklist of all the documents required:

The following is the Eligibility criteria for Education Loan –

1. The Loan Applicant should be a citizen of India with a valid Indian Passport
2. One should have a confirmed admission offer from the recognized college or university.
3. Co-Applicant (parent or guardian) should have a regular source of income and should also have a good credit history
4. There are some banks which also require the Applicant to qualify National Level Entrance Exam.

• Car Loan– As the term suggests, Car Loan is the amount that is borrowed from the Banks either for buying a new car or for the used car. There are times when there is a requirement of a new car but it goes out of budget. But, since Car Loans now are easily and conveniently available, one can apply for the same and purchase their dream car or get their old cars modified. Some of the major banks that provide Car Loans in India are State Bank of India, Punjab National Bank, Axis Bank, ICICI Bank, HDFC Bank etc.

Documents Required for Car Loan  

Here are some documents that are required to apply for a Car Loan

Eligibility for Car Loan –

One can apply for a loan online with the below mentioned eligibility criteria:

1. The Loan Applicant can be Salaried or Self-Employed to apply for a Car Loan
2. Loan Applicant should be a citizen of India, with minimum age of 21 years
3. The salaried individuals should have one year of work experience in the current job and two years in the same business for self-employed professionals.

• Personal Loan– Be it a financial, medical or personal requirement, Personal Loans have you covered. Personal Loans are mostly of two kinds – Unsecured and Secured. Unsecured Personal Loans are where no security or collateral is required while applying for the Loan. Secured Personal Loans on the other hand are which require one type of security in the form of a house, car, or savings. Mostly Unsecured Personal Loans are preferred over the secured personal loans in India. Some of the banks and NBFCs that provide Personal Loan are Punjab National Bank, State Bank of India, Yes Bank, HDFC Bank, Bajaj Finserv, etc. with YES Bank offering the lowest Interest Rate on Personal Loan starting from 10.75% onwards.

Documents Required for Personal Loan-

To apply for a Personal Loan, here are some of the documents that are required

Eligibility of Personal Loan –

To apply for a Personal Loan online, here is the list of eligibility criteria:

1. Individuals with minimum age of 21 years can apply for a Personal Loan
2. Salaried as well as Self-Employed Individuals are eligible to apply for a Personal Loan
3. There is a criteria of having minimum income for different cities which banks have specifically mentioned on their websites.
4. Financial Institutions also consider the Credit Score, Financial history & Repayment Capability of the Loan Applicant.

• Gold Loan –Gold Loan is a Secured Loan where Gold Jewellery is used as collateral. One can keep their gold as a security with the lender and get the money easily. Banks and NBFCs offer Gold Loan at affordable Interest Rate. Usually the lender examines the weight and quality of the gold and accordingly Loan Amount is given after verifying the documents. Some notable banks and NBFCs that provide gold loan are State Bank of India, HDFC Bank, Allahabad Bank, Muthoot Financial, Bajaj Finserv, etc.

Documents Required for Gold Loan

To avail a Gold Loan, only basic updated KYC Documents are required that include:

1. Identity Proof documents like Passport, Driving License, Aadhaar card, etc
2. Address Proof documents like Utility Bills – telephone, water, gas, etc

Eligibility for a Gold Loan

Gold Loans do not specifically have a list of eligibility criteria. One should be citizen of India with 18 years of age and should own Gold. Though all banks and NBFCs have different eligibility criteria for the same.

When it comes to Loans, there are certain terms which most of us aren’t aware about. Here we have discussed some of these terms that will help you understand while applying for an online loan.

• Interest Rate

Interest Rate is essentially a rental that you pay every month over an amount that you borrow for a certain period of time. Individuals borrow a specific amount to buy a house, a car, for education or for any financial crunch. Similarly, companies borrow a loan amount to fund their small or large scale business or to fund their start up. The Loan Amount that is lent is repaid either in a lump sum amount or in monthly instalments. The amount that is repaid is usually more than the borrowed amount since the financial lenders want their loss of the amount they lent to the loan applicants compensated.

• Fixed Interest Rate

Fixed Interest Rate is an interest rate which is charged on a loan amount that remains the same throughout the loan tenure. It is helpful for those loan applicants who do not want the interest rate to increase, which in turn will expand their Interest expenses.

• Floating Interest Rate  

Floating Interest Rate is an Interest Rate that fluctuates up and down according to the market conditions. Most banks and NBFCs also refer to it as variable interest rate as well. At times this can turn out in favor of the Loan Borrower who wants to save money while completing the tenure of the Loan.

• Application Fee

This fee is charged to the Loan Borrowers for processing an application for a loan. The Loan Application fees varies from lender to lender and it may also include monthly service fees. The application charge is nominal starting from Rs 500.

• Balance Transfer Charges

Balance Transfer is when the borrower wants to transfer his ongoing Loan to another financial institution to avail a cheaper Interest Rate for which the borrower needs to pay a particular Balance Transfer Fee to the initial financial lender

• Prepayment Charges

Prepayment Charges are levied by the financial lender where the Loan Borrower pre-pays the Loan Amount either in full or in part and has to pay a prepayment penalty for that.

• Service Charge

This is a type of fees that is charged to pay for the particular service you want to avail. Bank service Charges are mostly set at a flat standard rate but varies from financial lender to lender and product to product.

• EMI (Equated Monthly Instalments)

EMI is a fixed monthly amount paid by the loan borrower to the lender, for the loan amount they have availed, on a specific date every month. EMI is dependent on a couple of factors like the tenure and amount of the loan, rate of interest etc. One of the benefit of EMIs remain that the Loan Applicants know the exact amount that will be deducted each month for the entire loan tenure.

• Loan Calculator

Loan Calculator is a system where Loan Applicants can check how much monthly payment will be made on the Loan amount that they wish to avail and for how long they want the particular loan for. The Loan Calculator particularly requires 3 main inputs – Loan Amount, Rate of Interest and Loan Tenure.

What is CIBIL Score?

CIBIL Score is a three digit number ranging anywhere between 300-900. This score basically tells about all the financial history in the past of an individual. If one has a negative financial report, like missing out on EMIs, paying late EMIs, having financial debts, the CIBIL Score automatically reduces to a lower number and if the same financial report has a good financial history like paying all EMIs on time, having no financial debts, it increases the CIBIL Score. The closer your CIBIL Score is to 900, the stronger financial report you have and higher the chances of your Loan Approval.

Impact of CIBIL Score on Loans

CIBIL Score plays a vital role when it comes to finances. CIBIL Score is usually the first criteria that financial lenders check before approving or rejecting the Loan Application. Your CIBIL Score, in most cases, determines your financial creditworthiness of whether you can repay the EMIs on time or not. Having a negative CIBIL Score does not necessarily mean that you cannot avail a Loan. Different financial lenders have different eligibility criteria which they keep in mind while reviewing the Loan Application. So even if you have a low CIBIL Score, one bank or financial institution might not approve the loan, but another bank may do so depending on the eligibility criteria of the bank.

But before you apply for any loan, it is advisable to get your CIBIL Score checked and follow a few measures to improve the score.

Here is a comprehensive list of a few factors that you should keep in mind to apply for a loan

1. Employment Stability

All the financial lenders check employment stability of the Loan Applicant while reviewing the Loan Application. Employment stability indicates the Loan Applicant has a stable work experience and has the ability to repay the EMIs on time.

2. Age of the Loan Applicant

Most of the private banks in India offer loans to individuals starting from the age of 21 till 60 years. Though the age criteria is different for different banks, but the probability of availing a loan at a younger age is higher.

3. Financial Stability

The current and past employment status is taken into consideration before approving any loan application. The banks want to know the repayment capability of the Loan Applicant which is why the work experience of any individual is important.

Another factor that is important is that of CIBIL score, a good financial rating increases the chances of availing a loan with favourable Interest Rates and EMIs.

For any business to start with its operation, a bulk funding is necessary. Some individuals take the risk upon themselves by funding their business with their own budget, while others take up loans to do the same. The are different monetary schemes that have been started by the government, catering to different sections of the society, mostly for small or large scale business industries. Some of them are:

• MUDRA (Micro Units Development and Refinance Agency Ltd) Loan Scheme/ Pradhan Mantri MUDRA Yojana

Under MUDRA, there are different loan schemes that one can opt for. Pradhan Mantri Mudra Yojana is a loan scheme which was launched in 2015, for providing loans up to Rs 10 lakh to the non-corporate, non-farm small medium enterprises. These loans are given by Commercial Banks, RRBs, Small Finance Banks, Cooperative banks, MFIs and NBFCs. Under PMMY, there are three products namely SHISHU, KISHOOR and TARUN to signify the stage of growth and funding of the beneficiary and also provide a reference point for the next phase of growth.

Eligibility for MUDRA Loan Scheme: Any Indian Citizen who wants to establish their own business activities like manufacturing, processing, trading or service sector with a loan requirement of less than Rs 10 Lakh, can apply for a MUDRA Loan scheme from either a Bank, NBFC or MFI under the PMMY Loan Scheme.

• CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)

The idea behind CGTMSE is to provide financial assistance to industries without any third party or collateral involved. One of the main objective of CGTMSE is that lender should give importance to check the financial viability and secure the credit facility only on the basis of assets financed. According to CGTMSE, a Loan up to Rs 200 Lakh can be given to the MSEs. The extent of the cover given by CGTMSE is up to 80% for micro and small enterprises operated and owned by women entrepreneurs and Loan given to the North Eastern States including the state of Sikkim.

Some of the Eligible Lending Institutions for CGTMSE are:

1. Specified and Regional Rural Banks
2. NSIC (National Small Industries Corporation)
3. NEDFi (North Eastern Development Finance Corporation Ltd)
4. SIDBI (Small Industries Development Bank of India)
5. NBFCs
6. Small Finance Banks
7. New as well as existing Micro and Small Enterprises are also eligible for the CGTSMSE Loan Scheme

• Stand Up India

Stand Up India is a scheme started by the Government of India for financing SC/ST or women entrepreneurs. The objective of this scheme is to facilitate bank loans between Rs 10 lakh and Rs 1 crore to at least one Scheduled Caste or Scheduled Tribe borrower and at least one-woman borrower per bank branch for setting up a greenfield enterprise. The purpose of this loan mainly is to focus on setting up a new enterprise in manufacturing, trading or service sector by SC/ST/ Women entrepreneurs.

Eligibility for Stand up India Loan Scheme:

1. SC/ST or women entrepreneurs above the age of 18 years are eligible for Stand Up India Scheme.
2. Stand Up India Loan Scheme is applicable only for Green field project, which particularly means first time investment and venture of beneficiary in the manufacturing or trading services.
3. The Loan Applicant should not have any previous default to any bank or financial institution.
4. 51% of the shareholding and controlling stake should be held by SC/ST women entrepreneurs, in case of the non-individual entrepreneurs.

• PSB Loans in 59 minutes

PSB Loans or Public Sector Banks in 59 minutes is an online marketplace, which enables the business individuals to apply for a Small Business Loan with Loan Amount starting from Rs 10 Lakh to Rs 1 Crore in just 59 minutes. This initiative was taken to ease the MSME Business, promote self-employed business in India by reducing the loan approval process and long queues at the bank. PSB Loans in 59 minutes aims at approving the business loan in 59 minutes from a long 30 day process and expected to be disbursed in 7-8 working days. The Interest Rate for PSB Loans in 59 minutes start from 8% onwards and this initiative is directly connected to the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) Loan Scheme. To apply for PSB Loans, one can visit  psbloansin59minutes.com

Eligibility for PSB Loans in 59 minutes-

There are a few criteria that will be looked into while applying for a PSB Loan. For Existing Borrowers, they should be GST, IT Compliant and should also have bank statement of last 6 months. The loan eligibility is also mostly determined on the factors like income and repayment capacity followed by some existing credit facilities and any other factors that have been set by the lenders.

SIDBI (Small Industries Development Bank of India)

With a view to ensure larger flow of financial and non-financial assistance to the small scale sector, the Government of India has set up the small industries development bank of India (SIDBI) under a special act of the Parliament in October 1990. It was formed with the idea of promoting, financing as well as developing MSME sector.

Some important features of SIDBI are:

1. SIDBI Loan Schemes are as per the requirement of your business. If your business does not fall in a smaller funding category and needs more funds, SIDBI will make sure to provide for the right kind of assistance.
2. MSMEs can avail different types of loans with different ticket sizes suiting different business requirement.
3. Business Individuals can also avail loans up to Rs 100 Lakh without having to provide any security or collateral.
4. Apart from giving loans to MSMEs, it provides financial assistance and advice to them.

One of the main focus of SIDBI remains to emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it globally strong.

• NABARD (National Bank for Agricultural and Rural Development)

NABARD was formed as an initiative to strengthen the rural economy of India through some of the specific departments like developmental, financial and even supervision. Most of this includes refinancing rural infrastructure and help in designing new rural development schemes. With NABARD, the farmers are encouraged to take up projects by subsidizing a portion of the entire cost of the project.

Eligibility for NABARD Loan Scheme

1. NGOs/Voluntary Agencies
2. Government Agencies
3. Trusts of Corporates
4. NSDC affiliated training institutions

One of the main functions of NABARD is to provide refinance for rural credit disburses by the State Co-operative banks and regional rural banks and other RBI approved financial institutions.

Female Entrepreneurs can now have the option to avail Business Loans from multiple reputed banks with attractive Interest Rates. There are a couple of Business Loan Schemes that one can look for that Banks have to offer for women entrepreneurs:

• Annapurna Scheme

The Annapurna Scheme is directed towards women entrepreneurs who are wanting to run small scale food catering business like tiffin services, snacks, home food services etc. This scheme is provided by State Bank of Mysore. The scheme provides Loan Amount up to Rs 50,000 for a period of 3 years. The loan amount can be used for buying equipment for Kitchen services. The interest rates of Annapurna Scheme are as per the ongoing market conditions.

• Stree Shakti Package for Women Entrepreneurs

This Loan Scheme is offered by the State Bank of India which aims particularly at supporting women entrepreneurs. To apply for Stree Shakti Package for women, an enterprise should have more than 50% of its share owned by women. In case the Loan exceeds Rs 2 Lakh, the Interest Rate will be lowered by 0.5%. SBI also does not necessarily require any security or collateral for loan up to Rs 5 Lakh.

• Dena Shakti Scheme

Dena Stree Shakti Scheme is offered by Dena Bank for women entrepreneurs. The Scheme can be used for multiple activities like Agriculture activities and services, for micro and small enterprises, Education and housing purposes. The maximum Loan Amount under this scheme is decided as per the guidelines of RBI. Similarly goes for the Interest Rate and other service charges.

• Udyogini Scheme

Udyogini Scheme offered by Punjab & Sind Bank came into existence with the idea of encouraging women entrepreneurs for direct agricultural activities. Women entrepreneurs who have a share capital of not less than 51% as partners/share holders/directors of any private company or members of co-operative society. The maximum loan amount is decided by the bank on the basis of purpose of the loan.

There is no requirement of collateral for loan amount up to Rs 25,000. Beyond Rs 25,000 the bank asks for security in the form of one of the following:

1. Guarantee of spouse of any third party
2. Land/Building property collateral security at least double the value of the Loan
3. Pledge of assets created out of bank loan

• Cent Kalyani Scheme

Cent Kalyani scheme is offered by the Central Bank of India. This loan scheme encourages women entrepreneurs to expand or start a new project. This scheme Is targeted for activities like Handloom handicraft, Self Employed Women, Women wanting to start small scale business like food processing, beauty parlors, tailoring, library etc. The purpose of Cent Kalyani Scheme is to meet the daily business requirement for women. Maximum Loan Amount that can be availed through this scheme is Rs 100 Lakh.

• MUDRA Yojana Scheme for women

This scheme is launched by the Government of India. There is a verification process, after which the female entrepreneur will receive a MUDRA Card which can be used to buy materials for small scale businesses. The schemes under this are categorized under Kishor, Shishu and Tarun and is mostly popular among the non-urban women entrepreneurs.

Agriculture being the backbone of our country, has a very huge role to play. Lot of Indian Banks provide Agricultural Loans to farmers who can set up their small scale business operations. Some of the banks that provide Agricultural Loans in India are:

Non-Banking Financial Institutions are the establishments that provide financial services with the banking regulations laid down by the Reserve Bank of India (RBI). NBFCs play a vital role when it comes to the financial services today, in the sense, if anyone wants to apply for a loan and is not eligible for a particular bank, he/she can apply for the same loan through any NBFC. They offer financial services in urban as well as rural areas, granting loans for new ventures.

NBFCs help in mobilization of resources, capital formation, they help in employment generation and maintain the financial stability of the economy. Here is a list of some of the NBFCs which provide loans online:

1. Bajaj Finance Limited
2. Mahindra & Mahindra Financial Services
3. HDB Financial Services
4. Muthoot Finance Limited
5. TATA Capital Financial Services Limited
6. Aditya Birla Finance Limited
7. Capital First Limited
8. Kotak Mahindra Private Limited
9. India Infoline Finance Limited
10. Reliance Capital Limited
11. IndiaBulls Group
12. ICICI Securities Primary Dealership Limited
13. Hinduja Leyland Finance Limited
14. IFCI Limited
15. Shri Ram Transport Finance Company Limited

Paisabazaar.com is a platform, where one can visit to take financial guidance and we help in making their financial decisions a little easier. This platform gives a comparison of different financial services – Personal Loans, Home Loans, Credit Cards, Education Loans, Mutual Funds, Gold Loan, Savings Account, Mortgage Loans etc. With these services we help you make the correct financial decision for yourself. Paisabazaar.com has over 90 partners which includes some major NBFCs as well which offer more than 200 financial products. Paisabazaar.com provides you with the best and a detailed comparison on financial services, which includes checking your Credit Score and more depending on your financial profile.

Not only do we help you getting the best financial service, but also make sure you have access to different online tools related to Loans, like checking your Loan Eligibility, EMI Calculator and even savings. Our paperless process ensures that one gets all the information he/she is seeking when it comes to lending products. So, log on to Paisabazaar.com and get to know the latest evaluation of your financial profile right away!