We can need money for many purposes. Some of the purposes are, building the home, Purchasing a land, Purchasing a car and also fulfill all our needs. We can borrow money from banks. We can pay the money in flexible installments. Borrowing a money from banks is the very efficient way of funding. 

Types of Loans

There are four types of loans. That are secured loans, Unsecured loans, Demand loans and subsidized loans. 

Secured Loans

In secured loan we have to submit the bonds of our assets as a collateral security. 

Unsecured Loans

In unsecured loans we can get the loan without any security. Credit cards, bank overdrafts come under this category. 

Credit Card

Credit cards are mostly used for payments when we don't have the money in hand. We can pay the money to the bank when we are having the money. Bank's used to pay the shops against the card holders promise. Banks give certain time limit for paying the money. If the time exceeds the limit we should pay the money with interest.

Personal Loans

Personal loans are the loans that we get to fulfill our personal needs. 


We can get the money from our account when our account balance goes nil or below zero. We can get the money against the prior promise given to our bank account by us. Interest will be charged for overdrafts. Additional fees may also be charged for overdrafts. Interest rates are comparatively higher in unsecured loans.

Demand Loans

Demand loans are short term loans and in demand loan the interest rate is floating. We can repay the money at any time. But interest rate not constant, it is floating rate.

Housing Loans

Housing loans are the loans we can get it for building our house. Several banks are giving housing loans. Some banks are HDFC, SBI, CANARA BANK and LIC HOUSING FINANCE CORPORATION and etc. We can get the 85% of the cost of the property. According to the repayment capacity they can decide our loan amount. The consideration factors for giving loan are income, age, qualification, number of dependents, spouse's income, assets, liabilities, stability and continuity of occupation and saving history of our bank account. 

What documents needed for getting the loan

  • Identity card from the organization where they are employed.
  • Original salary slips.
  • Bank statements for 6 months
  • Documents of our properties if any
  • Ration Card
  • Voter's Identity Card
  • Photos of the borrower

Period for repayment

Period can vary from 10 years to 20 years. We can choose any time period as per our wish. 

Benefits of Loans

  • You can get the loan for any need. If you are in a need for money to buy a house, you can apply for a housing loan.
  • If you wish to purchase a car, then you can go for car loans
  • The person can purchase very expensive things by use of the loan
  • Loan is very, very useful in fulfilling our goals or dreams.

Drawbacks of Loans

  • Loans are long term debits for a borrowing person
  • Missed out of payments will give a serious of consequences.
  • Earlier repayment not possible in some banks. And in some banks they are receiving repayment charges, when we repaying the amount fully or partially.

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