Secured vs Unsecured Loans
Retail / Personal Loans
Home Loan
For purchasing, constructing, or renovating residential property. Loan amounts up to ₹10+ crore. Tenure up to 30 years. Floating rates linked to repo rate (EBLR). Tax benefits under Section 80C (principal) and Section 24b (interest). LTV up to 90% for loans below ₹30 lakh.
Loan Against Property (LAP / Mortgage Loan)
Secured loan against residential or commercial property. Loan amounts up to 60–70% of property value. Tenure up to 15–20 years. Rates 9–14% p.a. Can be used for any purpose — business expansion, medical emergencies, education.
Personal Loan
Unsecured loan for any purpose — wedding, travel, medical, home renovation. Loan amounts ₹50,000 to ₹40 lakh. Tenure 1–7 years. Rates 10.5–36% p.a. depending on credit profile. No collateral, but requires stable income and good CIBIL score (700+).
Car / Vehicle Loan
For purchasing new or used vehicles. LTV up to 100% for new cars, 80% for used. Tenure 1–7 years. Rates 7–15% p.a. The vehicle itself serves as collateral — the hypothecation is removed from RC after full repayment.
Two-Wheeler / Bike Loan
For scooters, motorcycles, and e-bikes. LTV up to 90–100%. Tenure 1–3 years. Rates typically quoted as flat rates (10–20% p.a. flat = 18–36% reducing). Always convert flat rate to reducing for accurate comparison.
Education Loan
For domestic and overseas higher education. Up to ₹7.5 lakh without collateral; higher amounts require security. Includes a moratorium period (course duration + 6–12 months). Section 80E tax deduction on interest paid. Repayment typically 5–15 years after moratorium.
Gold Loan
Loan against gold jewellery or coins pledged as collateral. Fastest loan in India — disbursed in 30–60 minutes. Loan-to-value up to 75% of gold value (RBI cap). Rates 7–26% p.a. Typical tenure 3–36 months. Highly popular in rural India and for emergency credit needs.
Business / MSME Loans
Business Loan (Term Loan)
For capital expenditure, machinery, business expansion. Amounts ₹1 lakh to ₹10+ crore. Tenure 1–10 years. Rates 12–24% p.a. May require collateral for large amounts. Also available unsecured (up to ₹2 crore) for well-established businesses with good turnover.
MUDRA Loan (PM Mudra Yojana)
Government scheme for small business financing. Three tiers: Shishu (up to ₹50,000), Kishore (₹50,000–₹5 lakh), Tarun (₹5 lakh–₹10 lakh). No collateral required. Available through banks, NBFCs, and MFIs. Aimed at non-farm non-corporate businesses.
Working Capital Loan / Cash Credit
Revolving credit for day-to-day business operations — purchasing inventory, managing cash flow gaps. Linked to stock and debtor statements. Overdraft facility against current account. Rates 11–16% p.a. Interest only on the amount utilised, not the sanctioned limit.
Invoice Discounting / Invoice Financing
MSME raises funds against unpaid invoices from buyers. The lender advances 70–90% of invoice value upfront. Helps businesses manage cash flow without waiting 30–90 days for payment. Popular with B2B businesses selling to large corporates.
Equipment Finance / Machinery Loan
For purchasing industrial machinery, medical equipment, vehicles for business use. The asset being financed serves as collateral. LTV up to 80–100%. Tenure matches asset life. Popular with manufacturers, logistics companies, hospitals.