BUSINESS LOAN

PERSONAL LOAN

HOME LOAN

LOAN AGAINST PROPERTY

LOAN AGAINST INSURANCE POLICIES

GOLD LOAN

LOANS AGAINST MUTUAL FUND AND SHARES

LOAN AGAIST FIXED DEPOSITS

A personal loan is one of the most popular types of unsecured loans that offer instant liquidity. However, since a personal loan is an unsecured mode of finance, the interest rates are higher than secured loans. A good credit score and high and stable income ensure you can avail of this loan at a competitive personal loan interest rate. Personal loans can be used for the following purposes:

a) Manage all expenses of a family wedding.

b) Pay for a vacation or an international trip.

c) Finance your home renovation project.

d) Fund the cost of your child's higher education.

e) Consolidate all your debts into a single loan.

f) Meet unexpected/unplanned/urgent expenses.

Another type of unsecured loan, a short-term business loan, can be used to meet various entities' and organisations' expansion and daily expenses.

a) Working capital loans.

b) Machinery loans and equipment finance.

c) Small business loans for MSMES.

d) Loans for women entrepreneurs.

e) Loans for traders

f) Loans for manufacturers.

g) Loans for service enterprises.

Home loans are a secured mode of finance that gives you the funds to buy or build the home of your choice. You can apply online for a home loan at lower interest rates at Bajaj Finance. The following are the types of home loans available in India:

a) Land purchase loan: To purchase land for your new home

b) Home construction loan: To build a new home

c) Home loan balance transfer: Transfer the balance of your existing home loan at a lower interest rate

d) Top up loan: Can be used to renovate an existing home or have the latest interiors for your new home

Note that while buying a new property/ home, the lender requires you to make a down payment of at least 10-20% of the property's value. The rest is financed. The loan amount disbursed depends on your income, its stability, and current liabilities, among others.

A loan against property is one of the most common forms of a secured loan. You can pledge any residential, commercial, or industrial property to avail of the funds required. The loan amount disbursed is equivalent to a certain percentage of the property's value and varies across lenders. While some lenders may offer an amount equivalent to 50-60% of the property's value, others may offer an amount close to 80%. A loan against property helps you unlock the dormant value of your asset and can be used to satiate personal life goals such as higher education for children or marriage. Businesses use a loan against property for business expansion, R&D and product development, among others.

A fixed deposit not only offers assured returns but can also come in handy when you need a loan. The loan amount can vary between 70-90% of the FD's value and varies across lenders. However, it is essential to note that the loan tenure cannot be more than the FD's tenure.

For the longest time, gold has been one of the most favoured asset classes. The organised Indian gold loan industry is expected to touch Rs. 3.101 billion by 2019-20, according to a KPMG report, thanks to flexible interest rates offered by financial institutions. A gold loan requires you to pledge gold jewellery or coins as collateral. The loan amount sanctioned is a certain percentage of the gold's value pledged. Gold loans are generally used for short-term needs and have a short repayment tenure compared to home loans and loans against property.

Yes, you can also avail of loans against your insurance policy. However, note that all insurance policies do not qualify for this. Only policies, such as endowment and money-back policies, which have a maturity value, can avail of loans.

Thus, you cannot avail of a loan against a term insurance plan as it does not have a not have any maturity benefits. Also, loans cannot be availed against unit- linked plans as the returns are not fixed and depend on the market's performance. It is essential to note that you can opt for a loan against endowment and money-back policies only after they have acquired a surrender value. These policies gain a surrender value only after paying regular premiums continuously for three years.

Mutual funds can also be pledged as collateral for a loan, an ideal vehicle for long-term wealth creation. You can pledge equity or hybrid funds to the financial institution for availing of a loan. For doing so, you need to write to your financier and execute a loan agreement. Your financier then will write to the mutual fund registrar and put a lien on the specific number of units to be pledged. Typically, you can get 60-70% of the value of units pledged as a loan.

Similarly, financial institutions create a lien against shares for which the loan is taken, and the loan value is equivalent to a percentage of the value of the shares.