Types of Bank Loans in India You Should Know in 2024
The pivotal role that banks play in the development of any nation cannot be overstated. In India, banks offer a myriad of loan options, each tailored to specific needs and purposes. This article delves into the various types of bank loans available in India, providing insights into their details and application processes.
1. Home Loan | Types of Bank Loans in India
A home loan is a financial instrument designed to facilitate the purchase of a house or property. Typically availed by individuals early in their careers aspiring to own homes, the lending institution assesses the borrower’s creditworthiness to determine a pre-approved amount. This pre-approval empowers individuals to explore properties slightly beyond their immediate financial capacity, provided they maintain sufficient funds to meet the loan obligations.
Which Indian bank has lowest home loan interest rate? – As of now, the home loan interest rate starting from 8.30% p.a. is the lowest offered by “Bank of India.” However, the actual interest rate provided to applicants will be influenced by factors such as credit score, loan amount, occupation profile, employer’s profile, and other relevant criteria.
Home Loan Interest Rates of All Banks 2024
| Banks | Starting Interest Rate (p.a.) | Processing Fees |
|---|---|---|
| Kotak Mahindra Bank | 8.70% p.a. onwards | Salaried: 0.5% Plus taxes; Self-Employed/Commercial: 1.0% Plus taxes. |
| Union Bank of India | 8.35% p.a. onwards | 100% processing fee waived for Union Home loans, valid from 16 November 2023 to 31 December 2023, CIC Score 700+ |
| Bank of Baroda | 8.40% p.a. onwards | No processing fee; discounted upfront fee. |
| Central Bank of India | 8.50% p.a. onwards | 0.50% up to Rs.20,000 Plus GST (waived till 31 March 2024) |
| Bank of India | 8.30% p.a. onwards | Full waiver on processing fees for new home loans until 31 December 2023. |
| State Bank of India | 8.60% p.a. onwards | Clean Overdraft: No charges. SBI Pension Loan: 1% or Rs.1000-10000 Plus GST. Jai Jawan Pension Loan: No charges. Xpress Credit: 1.50% or Rs.1000-15000 Plus GST. |
| HDFC Home Loans | 8.50% p.a. onwards | Up to 0.50% or Rs.3000 Plus taxes, whichever is higher. Minimum retention: 50% or Rs.3000 Plus taxes, whichever is higher. |
| LIC Housing Finance | 8.85% p.a. onwards | Up to Rs.1 crore: 0.25% of the loan amount, with a maximum of Rs.15,000 Plus GST. For amounts above Rs.1 crore and up to Rs.2 crore, the fee is Rs.20,000 Plus GST. For amounts above Rs.2 crore and up to Rs.5 crore, the fee is Rs.25,000 Plus GST. For amounts above Rs.5 crore and up to Rs.15 crore, the fee is Rs.50,000 Plus GST. |
| Axis Bank | 8.70% p.a. onwards | Up to 1% or min. Rs.10,000 Plus GST |
| Canara Bank | 8.55% p.a. onwards | Contact the bank |
| Punjab and Sind Bank | 8.55% p.a. onwards | 0.15% of the loan amount will be charged, with a minimum of Rs.1000 and a maximum of Rs.3750. For loans above Rs.25 lakh and up to Rs.50 lakh, the fee is 0.25% of the loan amount, capped at a maximum of Rs.12500. Similarly, loans above Rs.50 lakh but less than Rs.75 lakh incur a fee of 0.25% of the loan amount, with a maximum limit of Rs.15000. Loans of Rs.75 lakh and above carry a charge of 0.25% of the loan amount. |
| IDFC First Bank | 8.75% p.a. onwards | Up to 3% of the overall loan amount. |
| Bank of Maharashtra | 8.35% p.a. onwards | No processing fees. |
| Indian Overseas Bank | 8.85% p.a. onwards | Processing charges are completely waived, entailing a 100% exemption. |
| Punjab National Bank | 9.40% p.a. onwards | 0.35% (Max Rs.15,000) |
| UCO Bank | 8.45% p.a. onwards | Contact the Bank. |
| IDBI Bank | 8.45% p.a. onwards | 0.50% (Rs. 2,500 – Rs.5,000) |
| HSBC Bank | 8.45% p.a. onwards | 1% of loan amount or Rs.10,000, whichever is higher. |
| Karur Vysya Bank | 8.95% p.a. onwards | Loans up to Rs.25 Lakhs incur a charge of Rs.2,500 Plus GST. Loans ranging from Rs.25 Lakhs to Rs.50 Lakhs carry a processing fee of Rs.5,000 Plus GST. For loans exceeding Rs.50 Lakhs, the processing fee is Rs.7,500 Plus GST. |
| Saraswat Bank Home Loan | 8.60% p.a. onwards | Up to Rs.35 lakh: Nil Rs.35 lakh – Rs.50 lakh: 0.30% of loan amount Rs.50 lakh – Rs.70 lakh: 0.40% of loan amount Rs.70 lakh – Rs.1.40 lakh: 0.50% of loan amount |
| Jammu and Kashmir Bank | 8.75% p.a. onwards | 0.50% Plus GST (min. Rs.2,000 and max. Rs.50,000) |
| South Indian Bank | 8.50% p.a. onwards | 0.50% of the loan amount or a minimum of Rs. 5,000 + GST |
| PNB Housing Finance Limited | 8.50% p.a. onwards | Up to 1.00% |
| Federal Bank | 8.80% p.a. onwards | Contact the bank |
| Standard Chartered Bank | 8.65% p.a. onwards | Contact the bank |
| Aavas Financiers | Contact the bank | 1.00% |
| Karnataka Bank | 8.58% p.a. onwards | Contact the bank |
| Sundaram Home Finance | Contact the bank | Up to 0.75% of the loan amount plus applicable GST. |
| Dhanlaxmi Bank | Contact the bank | 1.00% of the loan amount, Plus service tax (with a minimum of Rs.10,000 Plus service tax). |
| Tata Capital | 8.70% p.a. onwards | Rs.999 Plus GST |
| Tamilnad Mercantile Bank | 9.45% p.a. onwards | 0.50% of loan amount Plus GST |
| Bandhan Bank | 9.16% p.a. onwards | 0.25% to 1.00% plus GST |
| Yes Bank | 9.40% p.a. to 10.25% p.a. | 1.5% of the loan amount plus GST or Rs.10,000, whichever is higher |
| Hudco Home Loan | 9.25% p.a. onwards | Nil |
| Indiabulls | 9.30% p.a. onwards | 0.50% onwards |
| Aditya Birla | Contact the bank | Up to 1% |
| GIC Housing Finance | 8.80% p.a. onwards | Rs.2,500 Plus Applicable GST |
| Reliance Home Finance | 9.75% p.a. onwards | Up to 1.5% |
| Shriram Housing | 9.50% p.a. onwards | Up to 2.5% of the loan amount Plus applicable taxes. |
| India Shelter Finance | 10.50% p.a. to 20% p.a. | 2.50% Plus Taxes as processing fee |
2. Personal Loan | Types of Bank Loans in India
Offering flexibility, personal loans cater to diverse needs, allowing borrowers to utilize the funds as they see fit. Whether settling previous bills, indulging in personal luxuries, or planning a family vacation, the borrower has autonomy over fund allocation. It’s important to note that personal loans often come with relatively higher interest rates compared to other loan types.
| Bank | Interest Rate (p.a.) | Processing Fee |
|---|---|---|
| HDFC Bank | 10.5% p.a. – 21.00% p.a. | Up to 2.50% |
| ICICI Bank | 10.50% p.a. – 16.00% p.a. | Up to 2.50% |
| TurboLoan Powered by Chola | 14% p.a. | 4% – 6% |
| Yes Bank | 10.99% p.a. onwards – 20% p.a. | Up to 2% |
| Kotak Mahindra Bank | 10.99% and above | Up to 3% |
| Axis Bank | 10.49% p.a.- 22% p.a. | Up to 2% of the loan amount |
| IndusInd Bank | 10.25% p.a. – 26% p.a. | 3% onwards |
| HSBC Bank | 9.99% p.a. – 16.00% p.a. | Up to 2% |
| IDFC First Bank | 10.49% p.a. onwards | Up to 3.5% |
| Tata Capital | 10.99% onwards | Up to 3.5% |
| Home Credit Cash Loan | 24% p.a. – 34% p.a. | 2.5%-5% |
| Ujjivan Small Finance Bank | At the discretion of the bank | At the discretion of the bank |
| Aditya Birla Capital | 14% p.a. -26% p.a. | Up to 2% |
| State Bank of India | 11.05% p.a. – 14.05% p.a. | Up to 1.50% |
| Karnataka Bank | Between 12% and 17% | At the discretion of the bank |
| Bank of Baroda | 10.90% p.a. – 18.25% p.a. | Up to 2% |
| Federal Bank | 11.49% p.a. – 14.49% p.a. | At the discretion of the bank |
| IIFL | 12.75% p.a. – 44% p.a. | 2% – 6% |
| Bank of India | 10.25% onwards | Up to 2% |
| (Fullerton India) SMFG India Credit | 11.99% p.a. onwards | Up to 6% |
| IDBI Bank | 10.50% p.a. – 13.25% p.a. | Contact the bank |
| Karur Vysya Bank | 10.75% p.a. – 13.75% p.a. | 0.50% onwards |
| South Indian Bank | 13.1% p.a. – 20.6% p.a. | Up to 2% |
| Indian Overseas Bank | 12.5% p.a. – 13.5% p.a. | Up to 0.50% |
| RBL Bank | 14% p.a. – 23% p.a. | Up to 3.5% |
| Punjab National Bank | 11.40% p.a. onwards | Up to 1.00% |
| Bank of Maharashtra | 10.00% p.a. onwards | Up to 1% |
| Central Bank of India | 12.00% p.a. – 12.75% p.a. | Up to 1% |
| City Union Bank | At the discretion of the bank | 1.00% subject to a minimum of Rs.250 |
| J&K Bank | 12.40% p.a. – 13.40% p.a. | Up to 1% of the loan amount subject to a maximum of Rs.10,000 |
3. Education Loan | Types of Bank Loans in India
Recognizing the significance of education as an investment, banks extend education loans to cover tuition, books, and other related expenses. These loans support higher education pursuits, including studies abroad or skill-enhancing courses. The financial burden associated with education can be alleviated through this form of loan, making it an essential option for students.
Education Loan Interest Rates Chart 2024
| Banks | Interest Rates | Processing Fees |
|---|---|---|
| Union Bank of India | 8.15% p.a. to 12.55% p.a. | Nil |
| State Bank of India | 8.15% to 11.15% p.a. | Below Rs.20 lakh: No charges |
| Above Rs.20 lakh: Rs.10,000 (plus taxes) | ||
| Punjab National Bank | 4% p.a. to 11.25% p.a. | Nil |
| IDFC FIRST Bank | 10% p.a. to 15% p.a. | Up to 1.5% of the loan amount |
| Bank of Baroda | 8.55% p.a. to 12.50% p.a. | Up to Rs.7.50 lakh: No processing charges |
| Above Rs.7.50 lakh: 1% of loan amount up to Rs.10,000 | ||
| Canara Bank | 8.60% p.a. to 11.35% p.a. | 0.50% of sanctioned limit (Max. Rs.20,000) |
| Bank of Maharashtra | 9.45% p.a. to 11.30% p.a. | Nil |
| HDFC | 9.50% p.a. onwards | As per the criteria of the bank |
| Indian Overseas Bank | 9.75% p.a. to 13.3% p.a. | Contact the bank |
| ICICI Bank | 9.50% p.a. to 14.75% p.a. | Up to 2% plus GST |
| Karnataka Bank | 10.02% p.a. to 12.92% p.a. | Contact the bank |
| Tamilnad Mercantile Bank | 11.60% p.a. to 12.85% p.a. | Studies in India: No processing charge |
| Studies abroad: 1% of the loan amount | ||
| Karur Vysya Bank | 9.99% p.a. to 13.98% p.a. | Nil |
| Axis Bank | 13.70% p.a. to 15.20% p.a. | 2% of the loan amount plus GST |
| IDBI Bank | 8.50% p.a. to 11.10% p.a. | Contact the bank |
| Bank of India | 10.95% p.a. to 11.75% p.a. | Study in India: Nil |
| Study abroad: Rs.5,000 | ||
| UCO Bank | 9.7% p.a. to 13.10% p.a. | Refer to the bank’s website |
| Federal Bank | 12.55% p.a. onwards | Contact the bank |
| Kotak Mahindra Bank | Up to 16% p.a. | Nil |
- Most banks offer zero processing fees for courses in India. Please contact the bank for details.
- Credit score is not explicitly provided in the table, but it remains a significant factor influencing interest rates. Applicants are encouraged to maintain a favorable credit score for better loan terms.
4. Car Loans
Acquiring a vehicle, a significant investment for many, becomes feasible through car loans. A higher credit score enhances eligibility and may even lead to reduced interest rates. The swift approval process makes it convenient for individuals to bridge the gap between desire and acquisition when it comes to owning a car.
Best Bank For Car Loan In India 2024
| Bank Name | Best Car Loan Interest Rate | Processing Fee |
|---|---|---|
| SBI Car Loan | 7.20% p.a. onwards | Starting from 0.40% of the Loan |
| Federal Bank Car Loan | 8.50% p.a. onwards | As per terms and conditions |
| Canara Bank Car Loan | 7.30% p.a. onwards | 0.25% of the loan amount, subject to a minimum of Rs.1,000 and a maximum of Rs.5,000 |
| Bank of Baroda Car Loan | 7.00% p.a. onwards | Rs.1,500 |
| Axis Bank Car Loan | 7.45% p.a. onwards | Minimum: Rs.3,500, Maximum of Rs.7,000 |
Note: The car loan interest rates and processing fees are subject to change, and applicants are advised to check with the respective banks for the most current information.
5. Small Business Loans | Types of Bank Loans in India
Entrepreneurs with business aspirations can benefit from small business loans, which are instrumental in starting or expanding ventures. These loans may cover various aspects, including equipment purchase, facility upgrades, and inventory acquisition. Local banks or credit unions are often the preferred channels for applying for these loans, requiring financial records and a comprehensive business plan for approval.
6. Gold Loan
Pledging physical gold, be it jewelry or gold bars/coins, can secure cash through gold loans. The loan amount is determined based on factors such as gold purity. Borrowers must repay the loan in monthly installments to regain possession of the gold. Failure to meet repayment deadlines grants the lender the right to seize the pledged gold to recover losses.
7. Loan Against PPF | Types of Bank Loans in India
A straightforward lending option in India is a loan against Public Provident Fund (PPF). The loan amount is typically modest and contingent upon the funds available in the PPF account. The interest rate on this loan is usually 2% higher than the prevailing PPF rate. The loan becomes accessible after one or two years of opening the account and can be availed within the first five years.
8. Loan Against Credit Card
Similar to a personal loan, a loan against a credit card is often pre-approved, requiring minimal paperwork. Some lenders offer the option to convert this loan into an interest-free personal loan within a specified period. Following the conversion, interest accrues, and a processing fee may apply.
Understanding the diverse landscape of bank loans in India allows for a nuanced exploration of their applications across various sectors. Whether for personal, educational, or business purposes, borrowers must carefully consider the advantages and disadvantages of secured and unsecured loans before making informed decisions. Choose wisely when navigating the landscape of bank loans, ensuring financial endeavors align with individual needs and circumstances.
FAQs:
What is a home loan, and how does it differ from other types of bank loans?
A home loan is a financial product designed to assist individuals in purchasing a house or property. It differs from other loans in its specific focus on real estate transactions.
Can I use a personal loan for any purpose, and what distinguishes it from other loan types?
Yes, personal loans offer flexibility, allowing borrowers to use funds for various needs. The key distinction lies in the absence of specific earmarking for purposes, unlike education or home loans.
How does the pre-approval process work for a home loan, and why is it significant?
During the pre-approval process for a home loan, the bank assesses the borrower’s creditworthiness and provides a predetermined loan amount. This allows individuals to explore properties slightly beyond their immediate financial capacity.
What expenses can be covered by an education loan, and who qualifies for such loans?
Education loans cover expenses like tuition, books, and materials. They are available to students pursuing higher education, including studies abroad or short skill-enhancing courses.
What factors influence the interest rates on personal loans, and how do they compare to other loan types?
Interest rates on personal loans are influenced by factors such as creditworthiness and market conditions. Generally, they are higher than rates on secured loans like home or car loans due to the unsecured nature of personal loans.
How can a good credit score impact my eligibility for a car loan, and why is it advantageous?
Having a higher credit score not only increases eligibility for a car loan but can also result in lower interest rates. A strong credit score is indicative of financial responsibility, fostering confidence among lenders.
What is the significance of collateral in securing a small business loan, and what are the available options?
Collateral, such as real estate or equipment, is often required for secured small business loans. Unsecured business loans may be available for businesses without valuable assets, but the terms may vary.
How does the gold loan process work, and what happens if I fail to make timely repayments?
A gold loan involves pledging physical gold for cash. Repayment must occur in monthly installments, and failure to meet deadlines may result in the lender seizing the pledged gold to recover losses.
Can anyone apply for a loan against PPF, and what are the eligibility criteria?
The loan against PPF is available to PPF account holders after one or two years, depending on the lender’s policies. The eligibility criteria often include the account holder’s financial stability and adherence to specific timelines.
What distinguishes a loan against a credit card from other types of loans, and how can it be converted into an interest-free personal loan?
A loan against a credit card is often pre-approved and requires minimal paperwork. Some lenders offer the option to convert it into an interest-free personal loan within a specified period, after which interest accrues, and a processing fee may apply.
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