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Remember a time when getting a loan required lengthy negotiations with a bank officer, a whole bunch of documents and lots of patience? Those were the days when public sector banks with stringent regulations were the biggest players in the market and customers had to play their game.
But, times change! So the good news is whether you are seeking a personal loan, home loan, auto loan or business loan - banks are making it easier for you to get credit with minimal documents. In fact, they will come to your doorstep and help you through the process.
Keep in mind though, that you still need to fit the customer profile of the bank you are seeking the loan from and every bank offers loans to a specific customer profiles depending on their policies.
Also, the interest rate may vary depending on how well you fit into this profile. As you read on we will explain to you the kind of customers these banks are looking for, the documents they need and how you can negotiate to get a better deal. But let's start with the kind of loans available and some of the banks you can approach.
Banks & Types of Loans Available
Types of loans available to consumers can be broken down in 5 types:
Consumer loans are the easiest to get and require minimum documents. These are the kinds of loans you take when you are buying an expensive home appliance such as a high end computer, TV, laptop or cell phone.
Personal Loans require some documents, mainly a proof of residence, a qualifying income level and job or business stability. Personal loans start from as little as 25,000 and go as high as 20 lakhs. Remember, interest rates on personal loans vary wildly between banks and also depend on your income and job stability. For a personal loan it is always advisable to talk to multiple banks. The easiest way to do this is to apply using an online service such as ApnaLoan which will get you quotes from different banks.
Home Loans have gotten popular over the last decade and ninety percent of homes purchased in major Indian cities today are funded by a home loan. The difference in interest rate between banks is not as high as that for personal loans, but since a home loan typically lasts for between 10-20 years, even a difference of half a percent can make a huge dent in the final amount you end up paying to the bank.
Auto Loans are usually offered for between 5-7 years and are easy to get if you have a minimum income level to qualify. You can get loans on both four wheelers and two wheelers and very often your automobile dealer will have a tie-up with a lender to offer you loans at a good rate.
Business Loans are loans for self employed professionals to help them get working capital to start up or expand operations. Business loans are much easier to get today than they were even a couple of years ago and the interest rates are very affordable. If you've been thinking of starting up your own venture there's never been a better time in India to do this than, NOW!
Once you know the type of loan you are seeking, which you probably do by now, the next step is to figure our which banks you should talk to. The easiest bank to get a loan from will be the one in which you have your savings account, but they may not be the ones offering the best interest rates, so it is advisable to shop for your loan and talk to more lenders. Lenders can be of two types and below are listed some who are the most active in the loan market:
Banks offering Personal Loans & Home Loans:
HDFC, Citibank, Standard Chartered, ICICI, IDBI, HSBC, Axis Bank & Deutsche Bank
NBFC's (Non Banking Financial Institutions) offering Consumer Loans:
Kotak, Reliance Money, Chola Mandalam, Prime Finance, Pragati Finance, Fullerton India, Future Money, Barclays & MoneyLine
The next question you would ask is, should I talk to a bank or NBFC? And the answer is simple - BOTH. Depending on the loan amount you are seeking and your fit with their customer profile you will get different offers from different lenders. You will only get the best deal on your loan when you can negotiate with multiple banks. If you talk to just one bank before you take a loan, you are doing yourself a disservice.
So get smart, talk to every bank that is interested in your customer profile. This is as simple as going to the websites of banks and appying online or using an online loan comparison service such as ApnaLoan and filling out a form in five minutes --- THE BANKS WILL CALL YOU! Getting online to apply for your loan not only gets you the best deal, it also save a lot of time and energy.
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