Loans are crucial financial instruments, providing funds sourced from banks or financial institutions with interest applied over a set period. They serve as a lifeline during emergencies or as a catalyst for personal and business growth. The type of loan chosen affects the benefits received. Below, we explore various loans in India, offered by banks and financial entities, to understand their benefits and features.

Secured Loans

Secured loans require collateral from borrowers. Due to the reduced risk for lenders, these loans generally offer lower interest rates. In default, lenders can sell the collateral to recover funds. Examples include:

Home Loans

Home loans are secured loans for buying or constructing a house, with the property as collateral. LTV ratios reach 80%, and loan terms range from 10 to 25 years, with starting interest rates of 7% to 7.5% per annum.

Gold Loans

Banks provide these loans against pledged gold. While repaying only interest monthly, the principal is settled at term end. LTV can reach 90%, with interest rates from 7.50% per annum.

Vehicle Loans

Borrowers can finance cars or two-wheelers using vehicle loans, where the vehicle itself is collateral. Rates typically range from 7% to 7.5% per annum, with LTVs sometimes covering 100% of the vehicle’s value.

Loan Against Property (LAP)

By mortgaging property, individuals can secure loans for various purposes, at interest rates starting at 8%, with LTVs between 65% and 70%.

Loan Against Securities

Individuals can obtain funds secured by shares or bonds. Due to security volatility, LTV is 50% of the security value, with interest from 7.50% per annum.

Title Loans

These loans allow up to 25% to 50% of a vehicle’s value as a loan, with the vehicle as collateral. Typically short-term, they carry high interest rates.

Non-recourse Loans

While collateral is required, lenders cannot pursue further repayment if the collateral covers the default amount. LTVs range from 60% to 80%.

Loan Against Fixed Deposits

With FDs as collateral, banks offer loans covering 60% to 75% of the FD value, with interest slightly above the FD rate.

Loan Against Insurance

Available if the policy has a surrender value, loans cover 85% to 90% LTV, with rates between 10% and 12% per annum.

Working Capital Loans

Assisting businesses with short-term finance needs, these loans incur interest from 12% per annum.

Unsecured Loans

Offered based on the borrower’s income and credit score, these loans have high interest due to increased lender risk:

Personal Loans

These loans cater to personal financial requirements like medical incidents, with interest from 8% to 10% per annum.

Short-term Business Loans

Meant for overcoming business financial deficiencies, these loans have rates from 12% to 18% per annum.

Education Loans

Financing higher education, these loans commensurate with education costs, offering interest starting from 8.85% per annum.

Credit Cards

Providing a credit line for purchases, these unsecured options carry interest rates between 18% and 36% per annum.

Bank of Baroda Loans

BOB, a leading bank in India, offers diverse loan products:

Home Loans: Available to Indian residents and NRIs, with interest starting from 8.25% per annum.

Gold Loans: On gold jewelry, up to ₹25 lakhs, starting from 9.75% per annum.

Vehicle Loans: Offered to various professionals, starting from 8.50% per annum.

Loan Against Property: Minimum income criteria apply, with rates from 10.20% per annum.

Loan Against Securities: For business professionals, beginning at 9.25% per annum.

Personal Loans: With interest from 10.25% per annum.

Education Loans: Including Baroda Vidya, Scholar, and Gyan, with rates from 8.85% per annum.

Concluding, loans address various financial needs, whether for purchasing real estate, vehicles, education, or business ventures. Understanding the types and features of loans helps make informed choices. BOB’s range of loans, attractive rates, and terms make it a favored choice. Whether secured or unsecured, BOB provides solutions to meet financial demands.