We have multiple lenders in our country who offer various types of loans. We choose loans based on our need. Loans can be segregated into two categories: secured or mortgage based and unsecured or non-mortgage based loans. For the first category, you need to pledge a security for obtaining a loan. Examples would be loan against property, gold loan, etc. In the second category, you apply for a loan to build an asset. You do not usually provide any security for this purpose. Sometimes, the asset that you are building would itself act as security for the bank. Examples would be loan for purchasing a house, education loan, etc.
(Also see: Best interest rates on home loans)
Let us explore the un-secured loans category such as home, personal, car, two wheeler and education loans.
|Sub-categories/Usage||Typical interest rates for Public sector banks||Typical interest rates for Private sector banks|
|Loan for purchasing flat/house/land|
|Loan for Renovation|
|NRI home loans|
|Top up loans|
|Consumer durable loans|
|Loans for Marriage|
|Loans for purchasing computers|
|Loans for purchasing new cars|
|Loans for purchasing used cars|
Two wheeler loan
|Loans for purchasing two wheeler vehicles|
|Loans for tuition fees and other expenses related to graduation/post graduation or professional courses in India or abroad.|
- SBI currently offers the best rate on home loans at 10.15%. SBI also has various types of home loans available.
- HDFC offers the best rate from private sector banks. For women customers, a further discount is offered on home loans.
- Top up loans can be taken from Rs. 5 lakhs to Rs. 50 lakhs with repayment tenure of 10-20 years.
- Repayment period on home loans is usually 15-20 years. However, Bank of India offers flexibility of home loan repayment up to 30 years.
- Personal loans are the costliest among all loans. Loans are given for purchasing consumer durables, marriage, festivals, etc.
- There is not much difference between personal loan interest rates of public and private sector banks.
- Loans are also available for purchasing used cars. However, interest rates are more than those for new cars.
- Two wheeler loans are costlier than car loans. Interest rates are almost the same for public and private sector banks.
- Education loans are offered to cover tuition fees, books, hostel fees and other expenses involved. Quantum of loan also depends on the type of institute. Loan approval is also easy for higher ranked institutes.
- SBI offers maximum loan of Rs. 10 lakh for education in India and maximum of Rs. 30 lakh for education abroad with tenure of 10-12 years depending on loan amount.