Just like we need professional advice in choosing the right investment avenues for helping us achieve our financial goals, similarly, one needs professional advice in helping us choose the right type of loan to avail.
This is so because a wide range of Loan products like home loans, personal loans, car loans, business loans and even credit cards are available in the market today with varying features & interest rates & which will have varying impact on your future finances. Hence the need for a professional to help us choose the right type of loans.
There are different types of LOANS available in the market today:
1. Home Loans (Fixed, Floating & Teaser rate loans)
2. Car or Vehicle Loans
3. Business Loans (CC, OD etc.)
4. Education Loans
5. Personal Loans
6. Loan against Property
7. Loan against Gold/ Securities
8. Credit Cards etc.
Home Loan is the best and cheapest option for financing your home. In case of you have additional funds requirement then Loan against Property, is another option where you can mortgage your existing property, if any. Gold Loan & Loan against Securities are other options to look at as these are secured loans where you are pledging your Gold or Investments. A relatively costlier option would be an unsecured Personal Loans & Credit Cards which are also a type of personal loans. Then there is Education Loan for study in India or abroad. It is way cheaper than other means to borrow and it also comes with moratorium period during which interest is calculated but not collected and principal repayment begins after the course period is over.
All the above types of loans are available in different avatars & different rates of interest. Within each category also, there are variations. A wrong choice of LOAN might unnecessarily burden you with extra EMI that might not be bearable.
Therefore, please consult a financial planner before availing any kind of LOANS. It might help you save a few thousands if not lacs.