A loan is a type of debt taken by an individual or a company from a bank or NBFC (Non-Banking Financial Company).
Usually, a Loan agency is a corporation or institution - which helps customers to apply for a loan as a borrower. Any borrower is needed to agree to certain conditions, including fees related to the loan process, financial costs, interest, date of payment, and other conditions.
People do not always have the funds to buy certain things or, for occasions, or to cover the sudden hospital expenses; in such emergencies, loans can be the option for individuals and businesses to borrow money from lenders where loan agencies help customers in applying for a loan.
When a lender lends money to a person or organization with a certain assurance or trust that the borrower will have to repay the loan with certain additional amount, such as interest rates, such a process is called a loan.
Nowofloan is a platform meant to save the borrower's time; Nowofloan provides loan offers from all the partnered banks and NBFC loan providers. Anyone can easily apply for personal loans and business loans where the applicant has to buy a membership with a nominal charge first. The benefits of a membership are that the user can get a loan offer from multiple banks. In case if the applicant does not get the loan, then the loan agency helps the applicant to apply for a loan again after 3 months. This membership stays valid for the span of 3 Months.
Nowofloan.com saves the applicant's time, offering a low-interest rate loan offer to the applicant. We have a vast customer network who have applied for a loan at Nowofloan.com, bought membership, and emerged as loan recipients in just 2 to 3 days. Nowofloan.com aims for easy loans for their customers.
There are three main components to a loan: the amount borrowed, the interest rate, and repayment time.
In such type of loan, the borrower lends money from a bank or a reputable non-banking financing company (NBFC) because they are bound by government policies, rules and are completely reliable. The lender can be any bank or NBFC (non-banking financial company).
Two main types of loans to be provided on security basis from Loan Service Provider or Loan Agency In India
1. Secured Loans
This type of borrower needs to put up a collateral mortgage for the money borrowed. If the borrower cannot repay the loan, the bank reserves the right to use the mortgage collateral to recover arrears. The interest rate of such loans is lower as compared to other loans.
2. Unsecured Loans
An unsecured loan does not require any collateral for loan disbursement. The bank analyzes the past relationship with the applicant, credit score, and other factors to determine whether he is eligible for this type of loan. The interest rate for such a loan may be higher than the secured loan.
Types of loans depending on the purpose
1. Education Loan
An education loan is a loan that helps the borrower to pay the fees for academic purposes like higher education. This course can be either an undergraduate degree, post-graduate degree, or any other diploma/certificate from a reputed institute/university. The primary requirement for getting a loan is to have an admission pass provided by the course institution. The borrower can get loans for local and international courses.
2. Personal Loan
You can go for a personal loan whenever you need money. The purpose of taking out a personal loan can be anything like paying off old debt, going for a vacation, funding for a home event and a medical emergency, or buying something. This type of personal loan is based on the applicant's past relationship with the lender and the credit score.
3. Vehicle Loan
A vehicle loan provides money for the purchase of two-two or four-wheeler vehicles. A four-wheeled vehicle can be new or used. Depending on the cost of the vehicle, the loan amount will be determined by the lending bank. You have to be prepared with a downpayment to get a vehicle (in most cases), as some banks rarely provide 100% loans. The vehicle will remain the property of the lender until full payment is made.
4. Home Loan
Home / Flat / Bungalow: A home loan is a good option to get money to buy a house, apart from the need for money to build a house, renovation/repair of an existing house, or to buy a plot for construction of a house / flat. In this case, the lender will keep the property and pass it on to the rightful borrower after full payment.
Loan Types Based on the Pledged Assets
1. Gold Loan
Many lenders offer cash when the borrower promises physical gold, whether it is jewellery or gold bars/coins. The lender gives the loan by checking the weight and purity of gold and many other things, and people can use these funds for any purpose.
The loan must be repaid in monthly installments to be cleared by the end of the given term, and the borrower can recover the gold if the borrower fails to repay on time, the lender reserves the right to claim gold to recover the loss.
2. Loan Against Property
In this type of loan, individuals and businesses pledge property, insurance policies, FDI certificates, mutual funds, shares, bonds, and other assets. Depending on the value of the mortgaged property, the lender offers a loan with some margin.
The borrower needs to make timely repayments to get the mortgaged property after the given term. Failing to do so, the lender may sell the property to recover the outstanding amount.
Important points considered by the lender to approve your application
- Applicant Credit Score
- Applicant Income and Employment History
- Applicant Debt-to-Income Ratio
- Collateral
- Downpayment
Features and Benefits of Loans
- You can always choose the type of loan based on your need and your qualifications.
- The lender determines the loan amount to you based on many factors such as the ability to repay, income, and others.
- The loan depends on the repayment period and interest rate.
- Many banks may charge loan processing fees on loans.
- Many banks or lenders offer instant loans that take minutes to hours to obtain.
- The interest rate is determined by the lender based on the guidance of the Reserve Bank of India.
- The lender determines the security requirement against the loan.
- Third-party guarantees can also be used instead of security.
- The customer should repay the loan in equated monthly installments for the predetermined loan period.
- The repayment option is fully or partially for loan pre-closure.
- Some loan types and lenders may charge a penalty for pre-closure of the loan.