There are numerous loan products and financing options available in the market across different banks and financial institutions. However, you need to understand and review what best suits your needs and requirements. Discerning which loan is ideal for you is understanding the terms of the loan and the security required to obtain the loan.
Listed below are the various loan types for credit users.
This is one of the most important types of loans for credit users. With a secured loan, you will be granted a loan by the creditor based on a specific property or collateral you provide. In case of a default, the creditor will recoup the money by liquidating the property used for collateral on the debt.
An unsecured loan is a loan, which is not supported by granting the creditor any collateral. Your lender will only rely on your creditworthiness and reputation for the repayment of the loan. Since there is no collateral associated with the loan, the risk is reduced but if you default on the repayment, there might be serious consequences. Unsecured loans rely heavily on your credit score when sanctioning your unsecured loan.
Credit cards are issued by banks and financial institutions, which allow you to use the money available as the limit. It is plastic money that you can use when making purchases. All you have to do is swipe the card for making the payment. However, you need to remember that you will have to pay an interest on the amount within the given tenure.
Banks provide commercial bajaj loans, which are similar to getting a mortgage. They are available for the short term, as well as, long term, and are very similar to consumer loans. You can take out the loan for a specific expenditure and a fixed amount of money can be borrowed for a particular period of time. You need to repay this amount with interest in due time.
Letter of credit
If you own a business, which deals with clients abroad, you can use a letter of credit. It is one of the most common loan types for credit users, who are into international business. It is a guarantee of payment on the proof that the contract terms between two parties have been met. It facilitates international credit purchases for business owners.
A slightly less risky loan option is a guarantor loan. It involves finding a guarantor for the loan to enhance your application when your credit score or financial profile is not up to the standards of the lender. In case of a guarantor loan, the co-signer will have to be a strong financial candidate with high income and good credit. It is ideal for those who do not have a high credit score and the credit of your guarantor will influence your application process. If you make timely payments under this loan, you will notice that the credit is improving.
These are some of the top borrowing options for individuals and business owners available in the country today. Whatever line of credit you may choose, it is important to keep your current financial position in mind and ensure that you make the EMI payments on time. Whenever you make a loan application, compare the interest rates, and choose the personal loan, which suits you the best. If you maintain financial discipline and make the EMI payment on time, you will be able to improve your credit score and increase your chances for a quick loan approval when you apply for a Bajaj Finserv loan in the future.
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