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Personal Loans

Personal loans are unsecured loans in which the bank loans you money on your creditworthiness and no security is required for the money borrowed. However, the interest rates of personal loans are higher than any other loan like home loan or education loan considering the amount of risk involved in lending the sum. Different Types of Personal Loans in India · are Wedding Loan, Travel Loan, Home Renovation Loan, Pension Loan, Education Loan, Festival Loan.

Business Loans

1. Term Loan 

One of the most common types of business finance is a term loan. The loan could be secured or unsecured in nature. The amount available depends on the business’s credit history. The tenure is fixed, ranging between 1 and 5 years if unsecured, or up to 15 – 20 years for secured business loans. A term loan is taken for a specific purpose, generally for capital expenditure. 

2. Start-up Loan

A start-up loan is for new business ventures. Applicants for such loans may not have a great credit history on their company due to a lack of business vintage. Thus, to judge the business loan eligibility, the lender will take into account the borrower’s personal credit profile along with that of the company. The current turnover figures and other financials are also considered to decide the loan amount, tenure, and interest rate applicable. The business should be established, and the applicant must submit proof of the business existence and registration.

3. Working Capital Loan

Working capital loans are types of small business loans taken to overcome the shortage of cash to operate a business on a day-to-day basis. It generates a balance in cash flow necessary to run a business. This loan is also helpful to deal with a shortfall of cash during the off-season or meet demand during a peak season. Most eligible applicants are service providers, manufacturers, wholesalers, retailers or traders engaged in exports and imports.

4. Loan against Property for SME

SME loans secured against property for businesses whose loan requirement exceeds Rs. 50 lakhs. Here, the applicant has to mortgage his/her property to avail of funds for business purposes. The borrower can apply for funds against either a residential or commercial property. Lenders can finance up to 70% of the current market value of the property. The title to the property should be clean and free from encumbrance. The mortgaged property should also be free of litigation. Tenure of such loans is up to 15 – 20 years, depending on the terms and conditions set by the lending institution.

5. Invoice Financing

Invoice financing is also known as invoice discounting or invoice factoring. This type of funding is especially for small businesses that encounter a time lag between raising invoices and receiving payment from the clients. The financial institution provides funds against the amount raised in the invoice. The lender can finance up to 80% of the invoice amount. Once the business receives the payment, it clears off the debt as per the decided tenure and interest rate.

6. Equipment Financing

It is the manufacturing businesses that usually opt for equipment financing or machinery loan. Manufacturing units require costly equipment for the operation of their business. And to purchase the machines, out of all the types of business loans, equipment financing is the most preferred one. This is because machinery loans are specific in nature, wherein the equipment in question is taken as collateral along with some other security. The interest rates could be lower than those charged on term deposits.

7. Business Loan for Women

Some of the financial institutions have special schemes on business loan for women entrepreneurs. Even the government of India has initiatives in place to encourage women in establishing small to medium-sized businesses. The advantage of specialized loans for women entrepreneurs includes a flexible loan amount, start-up loan, discount on the standard interest rates, and a faster loan process.

8. Overdraft

An overdraft facility is provided against securities or collateral, especially in terms of fixed deposits with the financial institution. The lender analyzes the borrower’s credit history, relationship with the institution, business cash flow and the repayment history before approving a certain fixed overdraft limit. The borrower can withdraw an amount required and pay interest only the utilized amount. The funds can be used in this manner as long as the principal and the interest amount are repaid as per the decided term.

9. Merchant Cash Advance

Here, the financial institution provides an advance of capital on a portion of daily debit card sales or credit. The borrower has to then repay the advance with a portion of the daily credit sales. The borrower must ensure that he/she has enough cash flow to manage the payments. The advantage of a merchant cash advance is that the person has to pay as per the daily sales. So, if the business is slow, the amount to return is also low, and when the business is doing well, one can repay more.

10. Business Credit Card

While a business credit card is not the very first option that business owners may select to finance their needs, it is still great for a short-term and immediate funding option. If the business owner is in need of fast cash and at the same time wants to earn rewards against payments done on debt, then a business credit card is a right option. Several financial institutions attract customers to this type of funding by offering benefits such as introductory cash back on spending protection/insurance cover, etc. However, the rates could be higher than that of traditional business loans.

Property Loans

Property Loan against Commercial & Residential Properties

Loan against property allows you to use the value locked up in a property to meet any expenses you may have. While the loan amount depends on the total value of your property, you are free to use the funds as you see fit. Your property acts as collateral for the loan, but you can continue to use it as before.

Vehicle Loans

An auto loan involves borrowing money from a lender that provides funds to pay for a vehicle up front. The borrower repays the debt in monthly installments, including interest, according to the agreed terms.

Housing Loans

Home Purchase Loan

A home purchase loan is a type of financial assistance provided by a financial institution such as Fullerton Grihashakti that enables you to purchase, renovate, and extend your new and resale home with ease. Loan providers like Fullerton Grihashakti offer home purchase loan products at nominal rates of interest spread over a comfortably long tenure ensuring that you can repay the loan without compromising on your standard of living.

Home Improvement Loan

A home improvement loan is a type of home loan, which is available for undertaking renovation, repair, and furnishing related work in existing house property and works similar to a home loan.

Home Construction Loan

It is a type of home loan taken for self-construction of a residential-house property on vacant land or adding another level to an existing building. The loan amount is disbursed in several instalments, which is linked to the completion of various stages of house construction.

Home Extension Loan

A home extension loan is taken to extend or increase the living space of your house. You can build additional floors or rooms by availing the home extension loan

Credit Cards

A credit card lets you borrow money (up to the given credit limit) and pay it back as and when due. When you make a purchase, the amount will be deducted from your credit limit and when you pay it back, the payment will be added back to your credit limit.

 
 

Wealth Facilitator

Personal Loans

Personal loans are unsecured loans in which the bank loans you money on your creditworthiness and no security is required for the money borrowed. However, the interest rates of personal loans are higher than any other loan like home loan or education loan considering the amount of risk involved in lending the sum. Different Types of Personal Loans in India · are Wedding Loan, Travel Loan, Home Renovation Loan, Pension Loan, Education Loan, Festival Loan.

Business Loans

1. Term Loan 

One of the most common types of business finance is a term loan. The loan could be secured or unsecured in nature. The amount available depends on the business’s credit history. The tenure is fixed, ranging between 1 and 5 years if unsecured, or up to 15 – 20 years for secured business loans. A term loan is taken for a specific purpose, generally for capital expenditure. 

2. Start-up Loan

A start-up loan is for new business ventures. Applicants for such loans may not have a great credit history on their company due to a lack of business vintage. Thus, to judge the business loan eligibility, the lender will take into account the borrower’s personal credit profile along with that of the company. The current turnover figures and other financials are also considered to decide the loan amount, tenure, and interest rate applicable. The business should be established, and the applicant must submit proof of the business existence and registration.

3. Working Capital Loan

Working capital loans are types of small business loans taken to overcome the shortage of cash to operate a business on a day-to-day basis. It generates a balance in cash flow necessary to run a business. This loan is also helpful to deal with a shortfall of cash during the off-season or meet demand during a peak season. Most eligible applicants are service providers, manufacturers, wholesalers, retailers or traders engaged in exports and imports.

4. Loan against Property for SME

SME loans secured against property for businesses whose loan requirement exceeds Rs. 50 lakhs. Here, the applicant has to mortgage his/her property to avail of funds for business purposes. The borrower can apply for funds against either a residential or commercial property. Lenders can finance up to 70% of the current market value of the property. The title to the property should be clean and free from encumbrance. The mortgaged property should also be free of litigation. Tenure of such loans is up to 15 – 20 years, depending on the terms and conditions set by the lending institution.

5. Invoice Financing

Invoice financing is also known as invoice discounting or invoice factoring. This type of funding is especially for small businesses that encounter a time lag between raising invoices and receiving payment from the clients. The financial institution provides funds against the amount raised in the invoice. The lender can finance up to 80% of the invoice amount. Once the business receives the payment, it clears off the debt as per the decided tenure and interest rate.

6. Equipment Financing

It is the manufacturing businesses that usually opt for equipment financing or machinery loan. Manufacturing units require costly equipment for the operation of their business. And to purchase the machines, out of all the types of business loans, equipment financing is the most preferred one. This is because machinery loans are specific in nature, wherein the equipment in question is taken as collateral along with some other security. The interest rates could be lower than those charged on term deposits.

7. Business Loan for Women

Some of the financial institutions have special schemes on business loan for women entrepreneurs. Even the government of India has initiatives in place to encourage women in establishing small to medium-sized businesses. The advantage of specialized loans for women entrepreneurs includes a flexible loan amount, start-up loan, discount on the standard interest rates, and a faster loan process.

8. Overdraft

An overdraft facility is provided against securities or collateral, especially in terms of fixed deposits with the financial institution. The lender analyzes the borrower’s credit history, relationship with the institution, business cash flow and the repayment history before approving a certain fixed overdraft limit. The borrower can withdraw an amount required and pay interest only the utilized amount. The funds can be used in this manner as long as the principal and the interest amount are repaid as per the decided term.

9. Merchant Cash Advance

Here, the financial institution provides an advance of capital on a portion of daily debit card sales or credit. The borrower has to then repay the advance with a portion of the daily credit sales. The borrower must ensure that he/she has enough cash flow to manage the payments. The advantage of a merchant cash advance is that the person has to pay as per the daily sales. So, if the business is slow, the amount to return is also low, and when the business is doing well, one can repay more.

10. Business Credit Card

While a business credit card is not the very first option that business owners may select to finance their needs, it is still great for a short-term and immediate funding option. If the business owner is in need of fast cash and at the same time wants to earn rewards against payments done on debt, then a business credit card is a right option. Several financial institutions attract customers to this type of funding by offering benefits such as introductory cash back on spending protection/insurance cover, etc. However, the rates could be higher than that of traditional business loans.

Property Loans

Property Loan against Commercial & Residential Properties

Loan against property allows you to use the value locked up in a property to meet any expenses you may have. While the loan amount depends on the total value of your property, you are free to use the funds as you see fit. Your property acts as collateral for the loan, but you can continue to use it as before.

Vehicle Loans

An auto loan involves borrowing money from a lender that provides funds to pay for a vehicle up front. The borrower repays the debt in monthly installments, including interest, according to the agreed terms.

Housing Loans

Home Purchase Loan

A home purchase loan is a type of financial assistance provided by a financial institution such as Fullerton Grihashakti that enables you to purchase, renovate, and extend your new and resale home with ease. Loan providers like Fullerton Grihashakti offer home purchase loan products at nominal rates of interest spread over a comfortably long tenure ensuring that you can repay the loan without compromising on your standard of living.

Home Improvement Loan

A home improvement loan is a type of home loan, which is available for undertaking renovation, repair, and furnishing related work in existing house property and works similar to a home loan.

Home Construction Loan

It is a type of home loan taken for self-construction of a residential-house property on vacant land or adding another level to an existing building. The loan amount is disbursed in several instalments, which is linked to the completion of various stages of house construction.

Home Extension Loan

A home extension loan is taken to extend or increase the living space of your house. You can build additional floors or rooms by availing the home extension loan

Credit Cards

A credit card lets you borrow money (up to the given credit limit) and pay it back as and when due. When you make a purchase, the amount will be deducted from your credit limit and when you pay it back, the payment will be added back to your credit limit.

 
 

Copyright © Twins Consultancy all rights reserved. DISCLAIMER : The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Twins Consultancy Group is not liable for any decision arising out of the use of this information.