A consumer durable loan is a line of credit that can be used to purchase home appliances and electronics such as air conditioners, computers, refrigerators, smartphones, cameras, theatre systems, modular kitchen appliances, etc. Any individual can obtain this loan from banking institutions with flexible repayment tenures. However, one must fall under the eligibility criteria stipulated by the financial institutions. Let’s have a look at its features and benefits.
Consumer durable finance offers several features and benefits.
The loan comes with a flexible repayment duration of up to 36 months, allowing you to repay the loan amount at your convenience.
Most of the lending organisations offer this loan at a 0% interest rate. However, the consumer durable loan interest rate varies from lender to lender as well as the products that you purchase.
While paying the EMIs, you will be saved from interest rates as most of these loans come with a no-cost EMI policy.
The documentation procedure is hassle-free and simple. Furthermore, customer service representatives are available to assist you throughout the process.
Several financial institutions are available in the market where you may apply for a consumer durable loan online or offline. You can refer to the table below to find more information.
Up to Rs. 1 Lakh
Up to Rs. 15 Lakhs
IDFC First Bank
Up to Rs. 5 Lakhs
Up to Rs. 5 Lakhs
Before obtaining a consumer durable loan, it is essential you evaluate your EMI obligations. This will assist you in making regular repayments without facing financial burden. To calculate the EMI, you can use this formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1],
P = principal amount
R = rate of interest
N = loan tenure
Although this is one of the ways to calculate EMIs, manual calculations might increase the risk of making errors. To steer clear of this issue, you can consider using an online EMI calculator. This online tool is made available to prospective borrowers free of cost and is easy to use.
Furthermore, the calculator displays the loan amortisation schedule, which is a table mentioning your monthly EMI obligation, including the interest and principal component. This schedule can help you make informed decisions regarding loan prepayments and foreclosure.
Below are the different types of consumer durable loans.
Depending on the lender and market conditions, these loans are offered at a fixed or variable interest rate. This mortgage can be paid off in weekly, bi-weekly, monthly, or quarterly installments. Furthermore, no security or collateral is required in order to obtain it.
Another sort of consumer durable loan that customers frequently use to make purchases is a credit card. The card comes with prior approval, allowing customers to buy products without worrying about their finances.
A consumer durable loan can be utilised to purchase electronic items. You can purchase the following products through this credit:
TV and more
Apart from these, you can also purchase refrigerators, air conditioners, washing machines and more using this loan.
Here is the list of eligibility criteria that you must fulfill to receive a loan.
Your age should be between 21 to 65 years.
Your minimum monthly income must be Rs. 15,000.
You should have working experience of 1 year in your current organisation.
Your age should be between 21 to 68 years.
Your business must have completed two years.
Your credit score should be above 700.
Below is the list of documents that you must have while applying for a loan.
Identity Proof (Aadhaar card, Voter Id card, Passport, Driving license)
Address Proof (Aadhaar card, Voter Id card, Passport, Driving license, Utility bills)
Passport Size Photograph
Form 16 (Salaried person)
ITR (Self-employed person)
Several lenders are available in the market who offer different amounts at a competitive interest rate. However, to have a seamless experience and receive a quick disbursal, Bajaj Markets is the right platform for you.
Following are the steps to apply for a consumer durable loan.
Visit the financial institution’s official website or download the app.
Go to the ‘Loans’ section and choose ‘Personal Loan’ among others.
Fill up your details to log in to the page.
After logging in, you will see multiple loan offers. Pick the best option as per your requirement.
Upload the supporting documents.
Following that, verification will be done.
Lastly, your money will be transferred into your account within a few hours.
Here are the factors that impact the interest rate.
CIBIL Score: The CIBIL score is crucial in determining the interest rate on any loan. You will be eligible for a low-interest loan if your CIBIL score is good. Consumer durable loans with low CIBIL scores, on the other hand, have a high-interest rate.
Loan Amount: Your interest rate is also influenced by the amount of your loan. Your interest rate will be higher if you apply for a larger loan.
Loan Tenure: Duration of a loan also affects the interest rate. A longer EMI period is associated with high-interest rates. Hence, keeping your repayment duration shorter will save you from paying extra money.
Consumer durable loans can be termed to be a type of EMI since the features of both are almost similar. However, some consumer durable loans can have interest while others may have no cost EMI.
A personal loan may be used for a variety of things, including medical crises, financial emergencies, holidays, and so on, whereas a consumer durable loan is a form of personal loan that can be used to buy things like household appliances and electronics.
These loans are unsecured as you are not required to provide any collateral in order to obtain it.
Yes, several lenders provide the policy of foreclosing or prepaying the loan.
The amount of loan depends upon the lender you choose.
The funds will be sent into your bank account once your loan application has been approved.
Yes, a consumer durable loan can significantly affect your CIBIL score. f you fail to repay the loan in time, your CIBIL score may fall and vice versa.
The minimum CIBIL score needed to obtain a consumer durable loan is 750 or more. However, some lenders might also approve applications of borrowers with poor CIBIL score in case of consumer durable loan.