10 most popular loan products

Here’s a look at the most popular loans being availed by different segments of the population in India today, to fund both personal and professional pursuits:

1. Home loans. These are the most popular loan products in India. They are loans extended for the purchase of new or resale property. They are secured loans with a lower rate of interest than other products such as personal loans.
2. SME loans. These are loans extended to businesses in the MSME sector so that they can scale up operations and achieve their goals. The loan amount can be used to buy new machinery, bid for a prominent contract or even purchase new property.
3. Loans against property. This is a secured loan, but it differs fundamentally from home loans. In this loan, the owned property is mortgaged to the financing institution for a certain tenure. The loan amount is fixed at about 70% of the property’s value at the time of application. The money can be used to buy new property or make large business payments.
4. Personal loans. These are unsecured loans with a high rate of interest. They are typically extended against the applicant’s credit history and income capacity, for a period generally not extending five years. The money can be used to fund child’s education or wedding, or personal medical procedure, etc.
5. Business loans. These are offered to businesses in both the urban and rural areas at a slightly higher rate of interest than home loans or loans against property.
6. Commercial vehicle loans. Some businesses require their own vehicles for the daily transport of goods and staff. These vehicles may comprise mini-vans, trucks, jeeps, SUVs or even trailers.
7. Two wheeler loans. These are useful for people in the rural areas, who find it easier to navigate bad, narrow roads on two wheelers. Premier financial institutions in India have made the two wheeler loan application process extremely simple.
8. Education loan. Education loans are popular products for those families wishing to send their children to national or foreign universities for higher education.
9. Rural housing loans. People in the rural hinterland are now able to buy their own land or ready houses on the basis of rural housing loans. The loan amount is given up to 70% of ready homes and up to 80% of self-constructed homes.
10. Rural business loans. Small and medium businesses in the rural areas of the country are now able to set up small office spaces, buy factory space and even invest in machinery through rural business loans.