Personal Loans
- People can use unsecured personal loans to fulfill their financial demands on an as-needed basis.
- Popular banks that provide loans for personal usage include ICICI, SBI, HDFC, and Axis Bank.
- The loan amount ranges from 50,000 to 20 lakh rupees, with a typical payback period of 1 to 5 years.
- Personal loans typically have interest rates that are higher than mortgages.
- To apply for a personal loan in India, a person usually has to submit documentation, including evidence of identification, proof of income, and proof of address.
- For example, if a customer applies for a loan from ICICI Bank with a loan amount of around 5 lakhs, the bank will offer them a personal loan, which they can easily apply for with a variable rate of interest. For this loan, the borrower has to submit some documents and pass the bank’s tests to get their loan. After they accept the loan, the bank will tell them about the monthly installments and tenure period. A personal loan can be used to meet basic needs, such as those related to education, starting a business, or other necessities.
Explain any three Loan Activities of Banks in India
Any substantial asset or verifiable record that is commonly accepted as payment for products and services as well as the repayment of debts, such as taxes, in a certain nation or socioeconomic sector is referred to as money. Banking and modern money are closely related. The financial system and economy of a nation are fundamentally dependent on banks. They support the expansion and growth of the economy. Banks offer a range of services for their clients, including loans, insurance, and savings accounts.
Lending money to individuals in need allows banks to serve as a middleman between those who have extra money (depositors) and those who do not (borrowers). People can open bank accounts, and the banks utilize that money to fund the needs of others who need loans. The depositor receives interest for making deposits at a higher rate of interest than the borrower pays. This is how loans work.
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