Types of loans and interest rates in India

While nearly 30% of the population is middle class, Indian people mostly depend on different types of loans for their needs. Either it can be marriage or new vehicle Indian banks is offering a wide range of loans to meet the expectations of their customers. Today we will have a look at different types of loans and their interest rates that are available in Indian market both public and private sector banks.

Types of Loans:

1. Personal Loan:
Personal loans are popular loans as the name suggest any individual can avail these loans. Banks possibly check individuals existing loans and credit cards before approving these loans as these loans are offered without any collateral. If any individual has a credit card, they can apply loan depending on their credit card limit. Interest rates are very high in this case ranging up to 20-34%.

2. Home Loan:
All most all major banks offer home loans, interest rates in these types of loans are less when compared to any other loans, and repayment duration is long can be up to 20 years. Individuals can apply home loans to build/buy new homes, renovate their existing homes, buy property or land to build a house.

3. Gold Loan:
Gold loans are very famous in India; banks will keep gold as collateral and provide loans to individuals. There are lots of private players in the market offering different schemes and policies for gold loans. Banks normally provide 50-60% of the value of the gold as a loan, and the interest rates are very less in this category.

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4. Loans against Insurance and Bonds:
People can avail loans by keeping their insurance policy as collateral. Usually, insurance providers allow their policyholders to take loan after three years. Interest rates are ranging from 10-15% depending on insurance companies.

5. Educational Loan:
Students can seek an educational loan for bachelors/masters or Ph.D. courses both in India and abroad. Loan amount and interest rates purely depend on the type of course and country of education students are opting. If the study is within India loan amount starts from 7 lakhs and it it is overseas the loan amount is between 15 -35 lakhs. Interest rates also vary from bank to bank. Almost all banks ask for collateral or guaranteer to support the loan.

6. Vehicle Loan:
Banks will offer loan to purchase both new and used vehicles. Repayment is minimum 18 months to 84 months, and interest rate will be between 13-17%.

7. Loans from PF:
Employees can avail loan from their provident fund up to 25-60% of their total savings. The interest rate is 2% more than PPF rate, and these loans are collateral free.

8. Agricultural Loans:
Still today people in a rural and semi-urban area are dependent on agriculture. Both public and regional rural banks offering loans to farmers for agricultural purpose. There are different types of loans offered to farmers to help them few to mention are to buy the seeds, fertilizers, agriculture vehicles. In public sector banks, the interest rates are very nominal, and farmers can repay once they harvest their crops.

The list is only partial and I have provided data with my own experience and research. Please let me know in comments if any data are rates are changed