Most often, due to lack of marketing or unawareness of the products that various banks offer, most people resort to availing a personal loan for their financing their needs. But little do they realize that their stubbornness to get their product and availing a personal loan at exorbitant rates of interest is not going to benefit them at all.
Here are a few options that are cheaper and better substitutes:
Gold loan:
With gold prices scaling new heights, there are better chances of you getting higher returns on your gold which you pledge with banks. Bank of India’s Star Mahila Gold Loan Scheme and Central Bank of India’s Cent Jewel are two schemes that women can avail of if they want to buy gold and diamond jewellery (hallmarked) or gold coins from banks. You need to produce a stamped receipt or an invoice for the total cost of jewellery and the bank will fund up to 80% of the purchase.
Consumer durable loans:
Loans for purchasing consumer durables like washing machines, LEDs or LCDs etc are also available at reasonable interest rates. The loan amount typically ranges from Rs 10,000-4 lakh and will depend on your net monthly income. Indian Overseas Bank provides a home decor loan of up to Rs 5 lakh at 13% interest to buy carpets or install cupboards. Central Bank of India has a Cent Computer Loan scheme, which can be availed of by students at an interest rate of 15% for buying a computer or laptop.
Health care finance:
Medical practitioners can avail this loan to purchase any medical equipment or to expand their medical facilities. Just by furnishing the invoice of the goods, along with proof of your academic qualification, you will be entitled to avail a loan under this category. Some banks provide the loan only if you have a minimum experience of, say, three years. You can get a loan of up to Rs 2 crore, but it is typically up to 80% of the invoice value. The repayment tenure varies from one to seven years. Union Bank of India also provides a moratorium period of 3-6 months.
Women’s loan:
Syndicate Bank’s SyndSaral loan scheme is for five years, a woman can repay the amount in seven years. Mostly, these loans are for women entrepreneurs who want to expand their business and the amount ranges from Rs 5-25 lakh. Andhra Bank provides special loans to women for buying two-wheelers or cars. While the interest rate is the same for the usual vehicle loan, here no processing fee is charged.
Pensioner’s loan:
Some banks provide loans to senior citizens, especially for those who receive a regular monthly pension that is routed through the particular bank. The repayment tenure is usually two to five years and the loan has to be repaid before the pensioner reaches the age of 70. United Bank of India allows you to repay till the age of 75, while Punjab National Bank offers loans for people beyond this age, but only for tenure of two years.
Festival loan:
If you do not want the inflation to dampen your festive spirits, then you can opt for a loan to finance your festival requirements. State Bank of India offers a festival loan at an interest rate of 16%. You can borrow an amount ranging from Rs 5,000-50,000, provided it is up to four times your net monthly income. The repayment period is one year and there is no prepayment penalty.