How to Apply for Different Types of Loans – Step by Step and Required Documents
Loans may be applied for diverse matters in today’s world. It could be used for funding a begin-up to buy home equipment in your newly purchased residence. Let us speak approximately the exclusive types of loans available in the marketplace and their precise characteristics that make those loans useful to the clients.
A loan is largely cash borrowed with a promise of going back within a specific length/ tenor. The lender decides a hard and fast price of interest which you need to pay at the money you borrow, along with the most important quantity borrowed. Right here are distinct kinds of loans to be had in India.
Types of loans
There are basically two types of loans:
- Secured loans
- Unsecured loans
Secured loans
The loans for which you need to submit collateral, an asset for safety of the money you are being given by the lender. That way, if you cannot pay off the mortgage, the lender still has a few methods to get their money.
Following are considered to be secured loans
1. Home loan
You can take home loans for the following reasons also these are the home loans available in India:
- Purchasing land for your home
- Constructing a new home
You can transfer your current home loan at a lower interest rate balance for rebuilding your home. So, you can take a home loan for renovating your existing home.
Documents required to apply for a home loan
- Proof of Identity: you can give your PAN Card/Passport/Voter ID/Driving License.
- Proof of Address: you can give Telephone Bill/Electricity Bill/Passport/ Bank Statement/Passbook.
- You need any of your property paper.
- You will have to give proof of Income Tax Return
How to Apply for home loan
- Visit your nearest bank or any loan giving bank’s website.
- Get The Loan Application Form.
- Fill in the form and submit it with the required Documents.
- You will have to pay the processing fee and discuss the bank valuation Of the documents, get approval.
- The Offer Letter and The Property Papers will be processed following a legal check.
- Then sign the final loan deal and the agreement, reading terms and conditions.
- The Loan will be given to you after these processes.
2. Loan against property (LAP)
For this loan, you can keep any of your property on collateral and avail of the funds required. The amount of the loan will be a percentage of your property.
Documents required to apply for a LAP loan
- Proof of Identity through PAN Card or Passport or Voter ID or Driving License.
- Proof of Address through Telephone Bill or Electricity Bill or Passport or Bank Statement or Passbook.
- You need property documents. And proof of your Income Tax Return.
How to Apply for LAP loan
- Get The Loan Application Form from any bank.
- Fill in the form and submit, attaching the required Documents as mentioned above.
- You will get the approval after a legal check of your property documents.
- You will have to sign the loan agreement, but read the terms and conditions.
3. Gold loans
You can avail the amount and benefits of gold loan through keeping any gold jewelry or coins as collateral. The amount you get as a loan is a certain percentage of the gold’s value. These loans have a short repayment tenure.
Documents Required
- Duly signed application form
- Passport size photographs
- Identity proof and Proof of your address
- Proof of age
How to Apply for a Gold loan?
- To apply for this loan either visit the lender’s website or the nearest branch of the bank.
- Submit the application form with required documents.
- The bank will verify all of those and will approve the loan amount. Please sign reading the terms and conditions.
Unsecured loans
These types of loans do not require any mortgage or collateral. The lender provides you the money analyzing your credit score and credit history like you have paid earlier loans in how much time. But unsecured loans have higher interest rates.
Types of unsecured loan
1. Personal loan
A personal loan can be used for the purposes like managing a wedding or an international trip, for home renovation, for a child’s higher education or to change all debts into a single loan or any urgent expense. You can fill any of these reasons for availing the personal loan.
Documents Required
- Proof of Identity & Age proof.
- Personal loan application with passport sized photograph.
- Residence proof through Passport or driving license or Voter ID or telephone bill, any bills like of electricity, water or gas.
- Bank statements for the last 3 months of account in which your salary is transferred.
- Salary Slips of last 3 months and Income Tax Returns of last 3 years.
How to Apply for a Personal loan?
- Visit any bank website or the nearest branch of the bank, which will give you the personal loan.
- Get the application form and submit it attached with the required documents.
- The bank will approve the loan amount, verifying all the documents. Please sign the agreement, reading the terms and conditions. No collateral required!
2. Education loans
Need for higher education from good performing institutions gets a demand for education loans. This loan can be taken for paying course fees or for expenses of accommodation or exam fee. The student cannot take the complete loan himself/herself, and needs parents, siblings or spouse as co-applicants.
An education loan has the moratorium period, in which the student has an option for not paying installations till 12 months.
Documents Required
- You need to submit all KYC documents like proof of identity, age and address.
- Bank statements for the last 6 months of account in which the parents or siblings or spouse salary is transferred.
- Copy of admission letter of institute.
- Mark sheet of 10th and 12th.
How to Apply for an Education loan?
- Visit any lender’s website or the nearest bank.
- Get The application form and submit it after filling the form with all the required documentations.
- The lender will verify the loan after analyzing all your documents. Please go through the terms and conditions before signing the loan deal.
3. Vehicle loans
You can be given a vehicle loan for a two or four-wheeler. You can purchase a new vehicle or second hand from the vehicle loans. The loan amount will be determined based on your credit score, the ratio of debt to income and loan tenor. Although due to being a luxury item, you will be charged higher interest rates.
Documents Required
- Proof of Identity, age and address through Passport or driving license or Voter ID or telephone bill, any bills like electricity, water or gas.
- The loan application with passport size photo.
- PAN Card
- Bank statements for the last 3 months of account in which your salary is transferred.
- Salary Slips of last 3 months and Income Tax Returns of last 3 years.
How to Apply for a Vehicle loan?
- To apply for a vehicle loan either visit the lender’s website or the nearest lender offline.
- Get the application form for vehicle loan and submit it with required documents.
- The bank will analyze all the documents and will give the loan amount. Please sign reading the terms and conditions.