Loan

The loan term is the length of time it takes for the loan to be paid off when the borrower makes regular payments. Personal loans help households meet the shortcomings they experience in buying a house or car, in children's higher education, or even in cases of medical emergencies, among others.

Types Of Loan

  • Personal Loans.
  • Credit Cards.
  • Home-Equity Loans.
  • Home-Equity Lines of Credit.
  • Credit Card Cash Advances.
  • Small Business Loans.

Educational Loan

Taking an education loan to replace the cost of studying abroad is the right choice. Depending on your size and profile, financial institutions can fund even 100% of the course fees. However, for the best student loan option, we need to carefully analyze the following key aspects of the various options available. When you apply to GyanDhan, we do this analysis for you. If you are doing loan comparisons yourself, consider these factors:

  1. Interest Rate: Even a 1% increase in the education loan interest rate has a substantial financial effect. Example - Loan Amount: Rs. 30,00,000, Loan Repayment in: 5 years after you graduate, Course Duration: 2 years; While at 10%, you’ll pay Rs. 9.7 lakhs in interest, at 20%, you’ll pay Rs. 10.9 lakhs - that’s a difference of 1.2 lakhs for just 1%!.
  2. Repayment Holiday/Moratorium Period: It is a specified period during the loan tenure in which the borrower is exempt from making repayments. Loans with moratorium period have a big plus, as you don’t have to worry about making repayments while you study.
  3. Tax Rebate: Education loans taken from Indian banks are special in that the entire amount paid as interest is exempt from income tax. This has a huge impact: Example - Loan Amount: Rs. 30,00,000, Marginal tax bracket: 30%, Repayment in: 5 years after graduation, Course Duration: 2 years, Interest Rate: 10%... If your loan has tax rebate, you can save Rs. 2.9 lakhs!
  4. Margin Money: The amount that you need to pay from your own pocket while the rest is paid by the bank. If a bank offers 0% margin, it means they’ll fund all your education expenses.
  5. Hidden Fees: There are numerous hidden fees that your lender might be charging you and when accumulated these will cost you a considerable amount

Car Loan

When evaluating a car loan application, lenders check your credit report to assess your creditworthiness. Many lenders also offer pre-approved car loans based on your credit score. Generally, people with a credit score of 750 or more have a greater chance of getting loan approval. Some lenders also charge lower interest rates on those with a higher credit score. Therefore, take your credit report from credit bureaus or online loan markets at least six months before applying for a car loan. This will allow you to check your previous credit score and give you enough time to take corrective action to improve your credit score. Prior to taking your credit report it will also be possible to detect errors and fraudulent transactions, which once corrected can increase your credit score and, therefore, your loan worthiness.

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