Loan is process of lending some money from the financial institutions such as banks and others and repays it. The process of loan is quite easy and clear, one would be given lump sum amount at a time and then the person has to repay it in installments. There are different types of loans and different types of interest rates associated with all these. There are different criteria for segregating the loans from one another. However, when we talk about Loans in India, there are different types of loans available with specific conditions. But all the loans are actually broadly classified and categorized and that is easy to understand.
So, here are the different type’s loans available in India.
Secured Loan is a loan that you get against an asset you have. There are many examples of Secured loans in India. However, the amount of loan always depends upon the market value of the asset you have. If you are taking a loan against any property may be land or house, then it can be Secured Loan. The Car or Vehicle Loan, Gold Loan are of same category where you have an asset for your loan.
Unsecured Loan is the opposite of the Secured and you can get a loan without any asset. However, thorough documentation and impressive credit history are required for these kinds of loans. The amount of loan generally differs from individual to individual. However, the interest rate of the unsecured loan is greater than the others because of greater risks involved.
The Subsidized Loan is provided to the qualified people for qualified purposes. The major aspect of the loan is that there is no interest charged on such loan. These loans are generally given by Government or Nationalized Banks. Most common examples of such loans are the farmer’s loans by Rural or Gramin Banks for equipments line tractors or implementation of new technologies.